Privatization and Education

As in other areas of American social policy, privatization has become a buzzword in education circles. In education, the term covers a broad range of activities, initiatives, programs, and policies. This includes reform ideas such as charter schools, vouchers, and the contracting out of education services such as school management.12

Education privatization has a long history in the United States. However, before the 1990s and the era of the Educational Management Organizations, contracting for services in education tended to focus on what has been called noninstructional services or nonessentials. Noninstructional services have included things such as food service, vending, transportation, and custodial services.13 Historically, the most commonly privatized services in K-12 education have tended to be transportation, cafeteria services, vending, and equipment maintenance.14 There are reasons for this. First, the argument has been made that these services supplement rather than supplant the role of government in education. Second, those who support the contracting of noninstructional services do so on the grounds of cost efficiencies. By this logic, if an outside vendor can provide a service more cost efficiently than a government employee, and if the service is nonessential or represents a onetime need, then government contracting in education makes sense.1

However, education privatization entered a new chapter in the 1990s, with the rise of educational management organizations (EMOs). EMOs are comprehensive in nature and include companies that manage entire schools or school systems. These firms typically assume full responsibility for all aspects of school operations, including administration, teacher training, building maintenance, food service, and clerical support. Educational Alternatives was one of the first EMOs. In 1990, it contracted with Dade County Florida to manage several schools. Soon thereafter, other EMOs were established and competing for contracts with urban school districts. From 1999 to 2003, the number of private companies managing public schools (mostly charter schools) tripled.16

Edison Schools, the brainchild of entrepreneur Chris Whittle, is perhaps the best known of the EMOs. Whittle had built a media empire around businesses such as television marketing broadcast in the waiting rooms of doctors’ offices. Through Channel One, Whittle entered the public school market. Channel One provides schools with free television equipment and in return guarantees advertisers a captive audience of students.

Whittle’s next project, EMOs, gained traction, in part because it coincided with a push for public school vouchers by Republicans, under the administration of President George H.W Bush.1 Chris Whittle was part of what one political insider called the education privatization brain trust. This group included Lamar Alexander, former Governor of Tennessee and Secretary of Education under President Bush, David Kearns, the Chief Executive Officer of IBM, and William Sanders, Professor at the University of Tennessee among others.18

This was the post Nation at Risk era—a time when corporate models of school reform were touted as a means to turn around both schools and the nation’s economy. Policy talk and action centered on decentralizing authority to the building level and holding schools more accountable for performance outcomes. Books such as Politics, Markets and America’s Schools by John Chubb and Terry Moe argued that the democratic institutions by which America’s schools had been governed for the past half century were incompatible with effective schooling.19 It was in this political climate, that the private management of failing public schools gained a foothold.

In spite of mounting political support, in the 1990s, there were strong negative public reactions to EMOs. It was reported that Edison was inflating test score performance in its schools as a strategy for buoying public and investor support. There were rumors, later confirmed, that Edison also was in deep financial trouble; it was losing money and going into debt. Wall Street investors in Edison grew skittish after Fortune magazine published an article identifying the Edison project as a failure. In 2003, the company went private.

 
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