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Education International

When Private Interests into Public Education Simply Do Not Add Up

published 3 December 2015 updated 3 December 2015
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When French economist Thomas Piketty made the best-seller list in 2014 with his weighty book, Capital in the Twenty First Century, it marked a rarity that an academic text was deemed ‘essential’ reading in airport bookshops.

So what was it about Piketty’s extraordinary overnight success? In part it was because he was breaking ranks with fellow neoclassical economists whose ideas have, since the 1980s, argued a free market would lead to greater wealth production that would trickle down.

However, Piketty’s work shows precisely the opposite. And he is not alone in drawing this conclusion. In 2014, the OECD published work confirming that not only has wealth trickled upward, but huge wealth is now concentrated in a tiny percentage – the 1 percent - whilst the middle and working classes have lost considerable ground in terms of their share.From being a relatively more equal society in the 1970s, the USA is now more unequal in the distribution of wealth and income than at any point over the past century. This also is the case for the UK, Portugal and Spain.

Education has not exempted from this market philosophy. What countries are committing themselves to is a particular logic: that education will be more efficient if it operates according to the rules of competition (choice, standards, information about performance, and so on leading to better quality) and that private firms will deliver goods and services more efficiently than governments (leading to cost savings). Typical mechanisms to deliver this market-based model include vouchers, charter schools, academies, free schools, market-based teaching, or test-based accountability. The assumption driving this model is that private management (if not ownership), with few regulations, will deliver better learning outcomes.

Now the problem with this model, dependent on low or no taxation, is that public education is as it says on the box: public, and dependent upon state redistribution. When those earning and owning the most do not pay their share of tax, then either the state spends more than it receives – hence borrowing more to pay the bills, or letting more and more of the tax burden fall to middle and working class families to shoulder a bigger share of tax relative to income and outgoings.

The market model has also been promoted by private interests looking to make a profit from delivering education services – either as managers and providers of schools, or in testing and other key services. In addition, profit seeking companies also increase inequality by limiting access to only those who can afford it.

The market model can be contrasted with a public investment model; a comprehensive education system premised on universal access, the preparation of citizens for the economic and wider political society, and equality. The mechanisms to ensure quality include the preparation of high quality teachers, equitable funding to schools, high quality infrastructures, and whole child pedagogy. The drivers of outcomes are that public ownership, public responsibility, and accountability through democratic processes ensure better quality teaching and learning environments for teachers and students and thus better learning outcomes. In the strong state-public investment model the state is able to draw upon a progressive taxation system in order to invest in the public interest, rather than depending upon families to find the resources for the own individual, inevitably unequal, investments.

In a forthcoming book on the issue, academics, Frank Adamson, Bjorn Astrand and Linda Darling-Hammond demonstrate the differences between a weak state-market model, and a strong-state public investment model. Pairing Sweden with Finland, Chile with Cuba, the USA with Ontario they draw a series of conclusions about each model. The evidence is quite stark.

They show that when we do the sums and add up the evidence, no country is able to show notably better results arising from a market investment model. Rather, over time, deep-seated inequalities begin to reveal themselves in such a way the entire system suffers. This reality has led Stanford education economist Martin Carnoy to argue that the negative aspects of inequality and markets, especially as they play out at the bottom of the social scale, seem to offset any positive effects of parent’s freedom to pick and choose among schools.

Similarly, the US states with the highest overall education performance have been the least involved in chartering or privatisation, while those with unregulated market based reforms perform the worst overall. To understand why publically funded education systems outperform their market-driven counterparts, Professor Marius Busemayer and his colleagues at Konstanz University, Germany, provide some details.

They argue that if elites favour private education because of the benefits that are derived, and if low income groups prefer more socialised systems because of the benefits a public system brings, much then depends on whether there is an easy opt-out clause, or opt-in incentives for the middle classes regarding a state investment model versus a market model. The middle classes are more likely to pursue a state investment model if they can valorise some advantage. But this has benefits for the working classes in that the middle class is likely to work politically hard for better public education and, furthermore, a diverse school mix works best for those with fewer resources.

It is clear from study after study that private interests in public education simply do not work. And the sums are not that difficult to calculate. This is a question of political will – as the evidence is increasingly compelling that market models are divisive and dividing. An education system committed to a public investment model and not a private market model would not only have a radical effect on politics, but lead to greater levels of economic productivity and social equality, and not more for a tiny elite.

A longer version of this paper was delivered as the Caroline Benn Memorial Lecture, House of Commons, London, 10th November, 2015.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.