Edison schools 'privatization with public money' scheme a failure?

June 27, 2002 2:18 AM

Edison schools 'privatization with public money' scheme a failure? School districts such as San Francisco's, which saw Edison as a panacea, may end up worse off for having played the privatization game. If Edison goes under, the district (could) be faced with huge logistical challenges: re-enrolling kids, renegotiating contracts with teachers who were working at Edison schools, maybe even dealing with the company's creditors.
posted by skallas (28 comments total)

This story has it all SEC investigations, worthless stock, test-centric education, and proof that the privatize everything/vouchers crowd are doing more harm than good.
posted by skallas at 2:23 AM on June 27, 2002

The Edison schools were a lousy idea from the getgo. I'm not surprised that they're turning in such a lousy performance. Hope they will go the way of Channel One, and soon.
posted by gordian knot at 5:22 AM on June 27, 2002

They took over Philly's schools last year. What a horrible idea. Can anyone else help but feel a correlation with the privitization of prisons?
posted by adampsyche at 5:27 AM on June 27, 2002

"Edison was built on the premise that a private company could run public schools more effectively and efficiently than local government could." Is it just me or should we be more worried about the quality of education in this country and NOT the bottom line which is pretty much all Edison was interested in and failed horribly at???

When are people going to realize that privitization of public schools is NOT addressing the need of the public education system in this country???

The irony of this entire situation is that Edison carried over the practices of the local school districts to cut costs - they hired younger, less experienced teachers whom they could pay less, they enforced a standard curriculem and regimented classroom setup BOTH of which are current failures of the public school systems that already exist (on the average - I know some public schools are incredible. This is not a bashing of public schooling rather a call for arms for US Education issues).


While the Edison idea seemed a good idea in theory, this is yet another quick solution/short cut that did not pan out in reality. If Edison goes under I would hope that school districts could work out some settlement to their benefit aka not having to re-enroll the kids who attend these schools, contracts until the end of the year for the teachers (for the school districts ARE the ones paying the teachers) and that buys them some time to reorganize. Edison should return the money (if they can - *gulp*) and if the schools are still hurting then it is time for the local governments and the federal government needs to recognize their responsibilty in this matter and shore up public schools across the nation both financially and educationally.
posted by gloege at 5:57 AM on June 27, 2002

The Edison school in S.F. was a pretty poor idea from day one, but the rest of the schools aren't exactly shining examples of achievement. Edison was let in the door on the old superintendant's watch, and he's not the most upstanding guy.

"...a correlation with the privitization of prisons?"

Schools, prisons, little difference in some districts.
posted by majick at 6:02 AM on June 27, 2002

Philly's public school system is totally screwed. I think privitizing the school system is messed up, too, but the private sector could hardly have done worse than the city itself did.

The state actually came in, sued, and took control of the schools away from the city.

... all in all, a total mess.

My understanding is, if live in the philly city limits and you have any money, you send your kids to a private school. There's really no other choice.
posted by ph00dz at 7:00 AM on June 27, 2002

We tried out Edison schools several years ago here in the Midwest (Wichita, KS), too. And they flopped here just like everywhere else.

I'm not too surprised or upset about that in itself, but they destroyed some great programs at the schools Edison took over.
posted by katieinshoes at 7:15 AM on June 27, 2002

This story has it all SEC investigations, worthless stock, test-centric education, and proof that the privatize everything/vouchers crowd are doing more harm than good.

Yes, it certainly proves that we should go back to the old way of doing things? I find it ironic that you decry this disaster, when it proves that often, it is easier to hold a private company accountable than a city government. How long did the city of San Francisco get to screw up public education without any punishment or accountability? One could argue that the system was so broken from the beginning that Edison did not have much to work with. It does prove that its not being done quite the right way, however:

Whittler's proposal was this: Edison would enter into an agreement with a school district under which the company would take over the operation of a school. The district would give Edison all the money typically spent to run that school. From that money, Edison would pay the school's operating expenses (and, in some cases, teacher salaries); any money left over would go into company's coffers.

The whole point of a privatization (I thought), was that a profit-motivated company would be more likely to innovate and succeed given competition in the market and incentive for profit. There is 1) no competition in this situation 2) no incentive for profit. True privatization would mean giving the parents their money back as a tax credit, letting them spend it on education as they choose, and standing back and watching as the market produced hundreds of alternatives to the public/edison model of education.
posted by insomnyuk at 7:53 AM on June 27, 2002

I think for privatization to work, and I think it could work, you would have to tie compensation to performance. The higher the standards actually achieved by the students (relative to an established baseline), the higher the profit earned by the administrators. With certain guidelines put in place to avoid abuses by schools attempting to "short-cut" their way to profits (e.g., finding ways to eliminate lower-ability students in order to increase overall performance). Obviously there would be a great deal of debate to determine these standards, but I think that would be healthy.
posted by rushmc at 8:12 AM on June 27, 2002

Insomnyuk, Yeah --

letting them spend it on education as they choose, and standing back and watching as the market produced hundreds of alternatives to the public/edison model of education.

this idea sounds good. But it ain't. The problem with market capitalism and the notion of "the more choices the better" is that it works out to totally disadvantage some people and does so randomly, instead of based on their decision-making skills. Take the example that libertarians like to use -- deregulating the taxi-cab industry. libertarians hate that its very expensive to get a cab medallion and that people should be able to just "hang out a shingle" and ferry people around town. This sounds good, until you imagine all the people who'd be screwed by getting into a cab only to be robbed / raped / killed, or having your cab driver get into an accident (and, of course, the driver won't have insurance so your family can't even sue on your newly retarded ass), or having really bad service getting driven all over town to take advantage of you because you're a tourist.

In this example, the problems are of a similar magnitude. If we refunded everybody's money and let anyone who wanted to start a school, there would be lots and lots of schools, granted. But there would be no oversight, no accountability -- there would be no way to guarantee that any student learned anything at all. It's true that over time, perhaps, the "market" would settle down and people would learn not to get into certain cabs or send their children to certain schools. But for quite some time, there would literally be pandemonium. Imagine being a college admissions officer under the first 10 or 15 years of such a system. Geez, what a nightmare.
posted by zpousman at 9:01 AM on June 27, 2002

rushmc said "I think for privatization to work, and I think it could work, you would have to tie compensation to performance. The higher the standards actually achieved by the students (relative to an established baseline), the higher the profit earned by the administrators."

They already have that firmly in place. Schools whose students test higher on standardized testing get more money than those who score around the median. Schools who score lower get some money to bring in programs to help beef up their students scores. Now public education is NOT about learning anymore - it is about shoving enough information down a child's throat that they can regurgitate properly during standardized testing that really only benefits the school system and proves that children can memorize a finite amount of information.

And we wonder why people don't think anymore? Seems they are encouraged NOT to...
posted by gloege at 9:22 AM on June 27, 2002

Proper standards would include more than standardized testing, one would hope, gloege.
posted by rushmc at 9:27 AM on June 27, 2002

They have Edison here in Dallas, and like all things in Dallas, they are or will become corrupted. Check out Dallas's history as far as the city council, school superintends and then Edison, which was not a surprise looking back, down the road.
A real private school is just that, an owner, not a corporation. My opinion from going to a private school, it helped me a lot, as the classes were small, and your more than a name in a crowd. Some of the better schools in Dallas area are public, from stories parents have told me.
What's next, instead of desks, pods.
posted by thomcatspike at 9:31 AM on June 27, 2002

True privatization would mean giving the parents their money back as a tax credit, letting them spend it on education as they choose, and standing back and watching as the market produced hundreds of alternatives to the public/edison model of education.

Of course for an open market to work on the level you propose schools would be competing with each other directly and the winner,, read the best at testing, would put the others out of business. Sometimes the laissez-fair way of doing things just isn't applicable and may cause more harm than good, as the Edison schools have shown. Not every social service can become profitable and its absurd to think that they can.

"So how was school today?"

"We're out till June, until after the corporate restructuring and until the stupid kids get back from re-education camp."

"Another aggressive educational corporate take over?"

"Yep, at least I'm learning about business!
posted by skallas at 9:50 AM on June 27, 2002

First worldcom, now this. I'm starting to lose my faith in public corporations!
posted by mecran01 at 12:48 PM on June 27, 2002

"Now public education is NOT about learning anymore - it is about shoving enough information down a child's throat that they can regurgitate properly during standardized testing...."

Public education has not been about learning for almost 100 years now, it has been about socialization, inculcating common values into the minds of children. John Dewey's reforms really swept the country, and as schools adopted his methods, traditional learning started going the way of the buffalo. Standardized testing is a stopgap measure at best, and your observation is correct, schools are spending time teaching kids to take tests, not to learn. As someone familiar with homeschooling, I can tell you that people who are really being taught reading, writing, math, history, and the like are perfectly capable of taking standardized tests without 'test taking training'. These kids consistently outperform their counterparts in public schools, where this 'test-taking education' is popular.

"Of course for an open market to work on the level you propose schools would be competing with each other directly and the winner,, read the best at testing, would put the others out of business. "

You assume, first of all, that all private entities participating in education would be for-profit. There would be no legal requirement for this, and there would definitely be an increase in non-profit, private organizations such as the kind that provide private schooling today, along with for-profit models. Clearly, there are ways to determine the quality of a school other than just test scores, such as visiting the school, sitting in on classes, talking to teachers and administrators, learning about the schools discipline, curriculum and hiring practices, talking to other parents whose children attend the school, and consulting independent auditing firms (sort of like US News' annual reviews of universities). Parents aren't stupid enough to just look at a school's test scores, only politicians are.

"Sometimes the laissez-fair way of doing things just isn't applicable and may cause more harm than good, as the Edison schools have shown. Not every social service can become profitable and its absurd to think that they can."

First of all, I have already stated that the Edison model is not truly laissez-faire because there is no possibility of competition (they were given a monopoly contract from the city, essentially) and no real profit based incentive. How do you know that social services can not be profitable? The failure of Edison schools has by no means proven this. In the 1800s, social services were provided through private, non-profit means anyway.

"But there would be no oversight, no accountability -- there would be no way to guarantee that any student learned anything at all."

This is simply not true. How do private organizations now guarantee that students learn things? What about private colleges which hand out degrees? One valuable piece of the puzzle for a private educational institution (non-profit or for-profit) is reputation, which would be key. Self-regulation spurred by parents and indpendent auditing firms would be more efficient and honest than the so-called reforms the government passes, which are at the mercy of the teachers unions which block just about any attempt at reform that would threaten their job security.

One other response to your question would be: how did Americans educate people before public education? They managed to do it somehow, and to hold high standards, free of centralized government intervention or regulation. I'm not saying there won't be government, there will be a great deal of self-government and local community government (meaning associations between parents determining the best schools and holding them accountable, sort of like the PTA but with way more consumer clout), but not the centralized, politicized, inneffective government we have today.
posted by insomnyuk at 2:07 PM on June 27, 2002

First of all, I have already stated that the Edison model is not truly laissez-faire because there is no possibility of competition (they were given a monopoly contract from the city, essentially) and no real profit based incentive.

Any school privatization scheme would need to be a well regulated monopoly. You can't have Education Corp trying to undercut the school or district next door because it wants that contract. Arts taking too much cash and not producing measurable smarts? Cut it. Athletics not profitable this quarter? Cut it. Rote learning and lots of test prep for those quality of education surveys. Sounds like heaven.

So you don't like Edison's scheme. Great, now we're going to gamble again with school money for some other schmoe's business plan? After he goes bankrupt we can rebuild it and try again with some other schmoe until they get it right? That's the thing about business, its not a big deal if Post goes out of business and I can't get Raisin Bran anymore. It is a big deal when the only school I can afford to send my kids to has to shut down because of a bad investment.

What the privatization crowd has to prove is that schools are not only wasteful but are not underfunded. Well Edison's biggest excuse is they just didn't get enough money from the districts. Whoa, isn't that what public schools have been saying since, umm, forever? These districts brought in the corporate guys and they fumbled badly. Need we bankrupt school districts all over the country because of some agenda to privatize everything?


How do you know that social services can not be profitable?

I don't. Some are, most aren't. Looking at our peers in the world - western postindustrial societies - they couldn't pull this trick off either.

I don't understand why the Ayn Rand crowd refuses to see we're socializing every industry under the guise of capitalism already. Look at the bailouts for the airlines and Amtrak and other corporate welfare. Billions of dollars.

Transportation services are socialized in many countries and its really not a problem. The privatization everything theory has to be falsifiable, saying that this company didn't do it right this time around but we'll do better later sounds more like an excuse to keep pushing an agenda than to face the real problems of funding for the education system.
posted by skallas at 3:09 PM on June 27, 2002

How many of your taxes dollars goes for education, that you never see. Meaning, my parents choose to send me to private, yet my neighbor friends education was paid in part by my parents, too. I never went so where is my credit. I have no children, yet I paid $1,300.oo for school taxes in 2001. No kids, so one or more non-expense on the city. What gives. Didn't I hear in a recent thread we don't have enough citizens having kids, not that I would argue with that point. Yet what are the lottos for, I know the school is getting a raw deal. But back to my 1st post on Edison and how it worked for a couple of years in Dallas. Last year received the cash bonus incentive for bringing up the students standards. Now this year they were down, and they want more money on top, and blame it for their down fall. Can you see the troll.

Get a better superintendent, maybe the real solution, have you seen their pay. We just went through two here recently, one did time for theft, the other left with a buy out clause option, which looked more like Jimmy Johnson departing the cowboys. I even had a neighbor in Califiornia who did it for free. And if anyone cared about your own child's welfare, then do something about, even if you have to make a sacrafice. Who said kids are cheap.
posted by thomcatspike at 4:03 PM on June 27, 2002

we're socializing every industry under the guise of capitalism already. Look at the bailouts for the airlines and Amtrak and other corporate welfare.

Amtrak is not a corporation, it is a de facto branch of government. As for the airlines, that's a rather extreme example considering what happened in September. And two examples, one of which is not even private, hardly qualifies as "every industry."

Transportation services are socialized in many countries and its really not a problem.

I guess if you don't consider crippling taxation a problem, you're right.
posted by ljromanoff at 4:20 PM on June 27, 2002

Amtrak is a private corporation that only sells stock to the government. It is not a social service. I didn't list two example ljr, notice the 'other corporate welfare' statement in there. I wont go into tax breaks and sweetheart deals for sake of simplicity.
posted by skallas at 5:11 PM on June 27, 2002

I guess if you don't consider crippling taxation a problem, you're right.

I've spent considerable time in Europe and have not found that to be the case either.
posted by skallas at 5:12 PM on June 27, 2002

Amtrak is a private corporation that only sells stock to the government.

Which is what makes it a de facto branch of the government. If only the government can own it, it's not a private corporation.

I've spent considerable time in Europe and have not found that to be the case either.

France, Denmark, Germany, Sweden, Italy and a bunch of other European governments all spend more than half of their countries' GDP every year, and have an average federal tax of between 35 and 50 percent, in addition to high VAT taxes, gas taxes, etc. If this is not high to you I wonder what your standards are.
posted by ljromanoff at 6:56 PM on June 27, 2002

Tax percentage doesn't mean squat when you end up with money in your pocket at the end of the month. Not being in debt to the government for college loans or because of doctor/hospital bills is a bit more complex than simply pulling a percentage out and crying, "Overtaxation!!!" Nice of you to completly ignore what those taxes pay for abroad and what you have to pay out of pocket here and the net savings especially for the bottom 50 or so percent.
posted by skallas at 7:09 PM on June 27, 2002

Amtrak is legally a private corporation regardless of your rhetoric.
posted by skallas at 7:10 PM on June 27, 2002

Tax percentage doesn't mean squat when you end up with money in your pocket at the end of the month. Not being in debt to the government for college loans or because of doctor/hospital bills is a bit more complex than simply pulling a percentage out and crying, "Overtaxation!!!"

Emotional nonsense. Not everyone has either college loans or hospital bills, but everyone who is compelled by law to submit a majority of their income to their government is overtaxed.

Amtrak is legally a private corporation regardless of your rhetoric.

It is neither owned by a private citizen or citizens nor can one purchase stock in it. It receives the majority of its revenue directly through government subsidies. It is wholly-owned by the federal government. It is no more private than the U.S. Army is.
posted by ljromanoff at 7:21 PM on June 27, 2002

Pointing out the simplicity of your argument is 'emotional nonsense' is it? Pointing out the services that these taxes pay for is hardly emotional its fact and the social benefits are quite real. Funny, I'm being taxed nearly to 40% now and I', not even getting those two services in the states. Now who's overtaxed?

Secondly, Amtrak is a private corporation as described in this 1992 lawsuit. Its relationship with the goverment makes it somewhat quasi-public, but it is not the social service you suggest it is and is a very lame compromise between die-hard lassie-fair capitalists like yourself and a social program. Arguably, it would have been better off as one or the other, but we all know 'socialism' is such a scary word to American politicians.
posted by skallas at 7:27 PM on June 27, 2002

btw that's SCOTUS's terminology there about Amtrak being a private corporation. I'd rather take their word for it than some dude on a website.
posted by skallas at 7:36 PM on June 27, 2002

Pointing out the services that these taxes pay for is hardly emotional its fact and the social benefits are quite real.

Real to those who receive them while everyone pays for them at a price so high that they spend more of their year working for the government rather than themselves.

Funny, I'm being taxed nearly to 40% now and I', not even getting those two services in the states. Now who's overtaxed?

U.S. taxes are too high, but the average American pays 50% less than the average European in income taxes, not to mention the significant difference in sales/VAT.

Secondly, Amtrak is a private corporation as described in this 1992 lawsuit.

The government may describe it as a "private corporation" but that practically means very little. Private corporations are not created by acts of Congress. Private corporations are not wholly owned by the Department of Transportation. Private corporations do not have their own line items in the federal budget. Stop kidding yourself.
posted by ljromanoff at 7:40 PM on June 27, 2002