Last week, in Part I of this series, I laid out my argument for why privatization will lead to the formation of large private school companies and franchises like we see in Korea. To summarize: It just makes economic and business sense. If people involved with education are interested in making a profit, it is clear that one of the easiest ways to do that is to grow larger. This week I’ll explain why a profit motive actually discourages innovation in the long run and won’t level the playing field. In fact, privatizing schools might very well end up costing parents money as they seek to give their children an edge.
Corporatization Kills Innovation
Even if people concede that corporatization is the inevitable result of privatizing schools, some still might ask what is wrong with schools banning together to bring down costs while offering more services, all while making education more cost effective and profitable? To answer this I will point to one of the main arguments made by private school advocates: Privatizing schools will lead to greater innovation through the forces of free-market economics and competition. These advocates have mistaken schools competing for students, or, more accurately, customers, with actual education innovation. They are not the same thing as Korea once again demonstrates.
Having worked for a large ESL company in Korea for many years and after becoming familiar with our competition’s practices, I can say with certainty that the last thing a large education company wants to do is innovate. Just like the US auto industry refused for so many decades to make fuel efficient cars, despite knowing the necessity of them, Korea’s large private schools view innovation as throwing away money they’ve already invested in their current educational method to try something untested. No matter how obvious it is that a change is needed, if that change comes at the expense of the bottom line, most large companies will not make those changes because they have investors to answer to if there are any losses, short-term or otherwise.
While a small private school might be more willing to try something new and different since it is not as expensive for them to do so and it might help them earn a spot in the market, that willingness to innovate will decrease once they find their niche and grow in size. The company will then shift its focus from innovation to maintaining the status quo and attempt to keep growing without having to reinvest in innovation. So, while education should be constantly adapting and adjusting to meet the needs of students and to address any shortcomings found in their understanding of a subject, the larger a company grows the more difficult and costly it will be for it to change. This is because change means buying new materials, retraining teachers and spending money to explain to customers and investors what they are doing.
Korea again shows all this with the fact that no major ESL franchise in Korea has implemented any major changes in their teaching methods in at least ten years based on the information I was able to gain while working in the industry, and this is despite the consistently poor test results of their students that go back to the beginning of ESL education in Korea. The risk and cost of trying something new is seen as being too great. Furthermore, in Korea, the larger schools set the tone for the market. While smaller schools could more easily innovate and try new things, most simply follow the market leaders because the easiest way for them to compete is to say they are offering the exact same kind of education as the bigger, better-known schools. This is seen in the fact that there are very few schools that I’m aware of, and I’m aware of many from my work and my social contacts where almost all my friends in Korea are ESL teachers, are offering an education format other than the test preparation found at all the large school companies. (I’ll address tests and test preparation in Part III of this series as reliance on this ineffectual style of education is also an inevitable result of large scale privatization.)
However, it could very well be that American companies might be more responsive to poor test scores than Korean companies have shown themselves to be. And they might be willing to change more quickly once they realize a method of education is not working, or like the US auto industry, they might ride their defective business model to the brink in an attempt to squeeze out every last dollar from it they can before finally being forced to admit it does not work and needs to be changed. However, unlike the auto industry where the only harm in this was making big cars no one wanted (and the environment), the end result of this business-minded practice being applied to education will be countless students who will receive an inferior education so that businessmen and investors can maximize profits. Once again, I’m sure I’m going to sound anti-business, but I have very little doubt that with businessmen at the helm of large education companies, at least a few are going to be profit first when it comes to making decisions about their customers’…I mean, students’ education.
Privatization Will Not Level the Playing Field
Another unrealistic expectation of privatization advocates is that privatizing the school system will somehow level the playing field for students. Korea once again shows that this could not be further from the truth. Despite its government having strict caps on the maximum amount that private, after-school companies can charge, something that would be considered very un-American and anti-business in the States, Korea still has a tiered education system with private, full-time international schools set up that only the wealthy can afford. These schools do, however, offer students with high test scores scholarships, but that’s about business.
This business model already exists in American where there are already plenty of private schools to service the truly gifted and the rich elites. They offer their students excellent educations and afford them wonderful opportunities. The success of these schools, which depends largely on the selection effect, a term coined by Malcome Gladwell, in which certain top schools’ success is entirely related to the fact they recruit top students to supplement the test scores of the moneyed elite. This is in contrast to the treatment effect of, say, the US Marine Corp in which they claim to be able to take anyone and turn them into a Marine. This is no different than our Ivy League system at the university level which does not claim they can take any student and turn them into a great student, they only claim that the best students go there. In other words, “Give us your best and we’ll give you the best.”
If a voucher system is created, these excellent private schools will not suddenly open their doors to everyone. They will, however, raise their prices to keep poorer students out in order to continue practicing the selection treatment and to maintain their exclusive reputation and good results. After all, they already have a reliable and steady client base that has shown they’re willing to pay out of pocket for their children’s education. The only thing that will change if schools are privatized is that rich people will now have the private education they would have paid for anyway subsidized at tax payer expense.
The end result in the unregulated, privatized education system America is likely to create will be a massive new tiering process for schools similar to what we see at the college level: A handful of schools will remain too expensive for most parents to afford while the majority of people will be sending their children to the corporate run schools that will be best able to keep their costs down so that their tuition can be entirely covered by the government voucher. There will be a myriad of schools in between, all of which are just a little more expensive than the next. They’ll be able to do this because of the notion that more money equals higher quality. So, where most parents currently aren’t paying anything for education, many will be enticed to spend just a few hundred dollars a year above their voucher amount to get their child into a school that’s perceived to be a notch or two better than the school Johnny down the street goes to. And we’ll have to hope that the finance industry does not get involved like they have at the college level and create an anxiety in parents that for a loan of just a couple of hundred dollars a year, they can give their child the edge they need to succeed in the world.
SideBar: In Part III I’ll explain how privatization will cause even more reliance on tests and create business scandals in the form of manipulating tests and test results. I’ll also explain how treating parents like customers will result in parents harming their children’s education.