Good Government

Greg Forster, Ph.D. | October 28, 2015

The for-profit nightmare before Christmas

Greg Forster, Ph.D.

If there’s one thing the government education blob knows it hates, it’s “profit.”

Inside the closed epistemic bubble in which the unions and their allies talk to each other, that word is all you have to invoke to establish that something is evil. And by repeating this association over and over in the centers of cultural power, they have taught millions of ordinary Americans to unconsciously assume that profit can’t mix with education.

A typical post from the blog of the Oklahoma Education Association (OEA) provides a window into this mindset. Posted shortly before Christmas in 2013, it darkly warned that instead of Santa, a “sinister sleigh” was approaching Oklahoma, “being pulled by those whose intent is to devalue public education and then turn education into for-profit businesses. … Alas, their motives are far from good. The bottom line for them is profit. Profit made at the expense of our children’s education.”

What does the education establishment always advocate? More spending. Where does that spending go? A good deal of it goes to for-profit corporations. From textbooks to cafeteria food to school buses, our schools supply the ghouls and vampires of the private sector with billions of dollars of business a year.

The great irony is that this educational blob is itself dependent upon profit in numerous ways. It’s a story as old as history: “It’s different when we do it.” In fact, the problem is not the existence of profit, but how the profit is made and who—government or parents—has the authority to decide when it’s being made at the expense of education.

It’s interesting to note that the OEA’s list of alleged profiteers contains only one group of actual profiteers. Here are the groups the OEA says are pulling the sinister sleigh: “You know the Arnold Foundation, our State Superintendent, the A-F grading system proponents, Chiefs for Change, Student’s First, testing companies and pension reformers. And then do you recall the most famous group of all? ALEC, the American Legislative Exchange Council.”

So let’s count up those malevolent reindeer: a non-profit, a government official, a policy coalition, a non-profit, a non-profit, testing companies, a policy coalition, and a non-profit. If this list of villains points to a need to restrain anyone, it points to a need to restrain non-profits.

The OEA could reply that these non-profits are really serving someone’s financial interest—say, their funders’. But the same is true of the OEA, which has spent decades fattening itself and its members and allies, all at the direct expense of school improvement, destroying the futures of Oklahoma children.

Aha, but what about those dastardly testing companies? Certainly they have an economic interest and will act to promote it. Again, this by itself makes them no worse (or better) than the OEA. The real question is whether the fact that testing companies make a profit introduces some special new evil.

That’s where the story gets really interesting. What’s sauce for the goose is sauce for the gander.

What do unions always advocate? More spending. Where does that spending go?

A good deal of it goes to for-profit corporations. Testing companies are not the only businesses that sell to schools. From textbooks to cafeteria food to school buses, our schools supply the ghouls and vampires of the private sector with billions of dollars of business a year. The next time the unions demand more spending, ask them to guarantee none of it will wind up in the pockets of those horrible for-profit companies they keep telling us they hate so much.

The unions are quick to point out that education reform serves the interests of for-profit businesses. It does—and so does a failure of education reform. In fact, more for-profit businesses are served by pursuing the unions’ tired old agenda than by pursuing reform. This helps explain why the unions have so much more money to advocate their view than the reformers do.

What’s that? The biggest thing the unions want schools to spend money on is salaries for school employees? True enough, but that only puts the problem one step back.

Do teachers and principals and guidance counselors and cafeteria workers and bus drivers take only enough salary to cover their own personal needs? Once their bills are paid, do they return the rest of their salaries to the school, saying, “Please, take this back, I don’t want to make a profit off education?” Or do they think it’s okay for them to charge what their services are worth according to the laws of supply and demand?

Some school superintendents in Oklahoma make a quarter-million dollars a year. Are the unions prepared to denounce this as “profiteering” at the expense of our schools? Or is it only profiteering when people they don’t like do it?

My favorite example comes from education labor reporter Mike Antonucci. He pointed out that teacher-union conventions—where rhetoric about the evils of profit is always abundant—are in fact a big business. Any large gathering of people is an advertising opportunity, and the unions have never been in the least shy about monetizing that opportunity. Try to reserve an exhibit booth at the next big union convention by paying only what it costs to provide the booth; if they turn you down, ask them how they justify such profiteering!

Let me be clear: for-profit corporations often do bad things. So do non-profit corporations and government agencies. This is not a debate between virtuous people who want to police the behavior of for-profit corporations and vicious people who don’t. Granted, there are a fair number of rabid free-market fanatics who will excuse any amount of private-sector wrongdoing if it helps them bash government. But there are at least as many on the other side who have the opposite blindness. The sensible thing to do is find a way to police the behavior of all types of organizations equally.

The assumption that profit is evil, or at least that it’s evil to let it come into contact with education, depends on a prior assumption—that for-profit corporations are more likely to misbehave than other kinds of organizations. Hence the resulting approach is to set up the more virtuous types of organizations (non-profit corporations and, of course, the omnibenevolent hand of government) to police the less virtuous type. These allegedly more virtuous organizations thus acquire large amounts of power and, just as important, public permission to use that power aggressively. This is the path to all big-government solutions, whether the old unconstrained union blob or the new centralized federal “accountability.”

Of course the solution is not to reverse the system and trust businesses to dictate to government. If you think all organizations are about equally likely to misbehave, you won’t want to set up any one of them as a dictator to control the others. You’ll want to disperse power as widely as possible among as many actors as possible.

Above all you’ll want to keep power in the hands of the one kind of group that really is the most likely to serve its members well—families. Parents can be trusted to look out for their own children virtuously a great deal more than for-profits, non-profits, or governments can be trusted to do anything virtuously. If we put choice—that is, power—into parents’ hands, we’d really see what it looks like to clean up education and get rid of all the organizations whose goal is to use schools as a cover to grab money for themselves. Heads up, OEA.

Greg Forster (Ph.D., Yale University) is a senior fellow with the Friedman Foundation for Educational Choice. He is the author of six books, including John Locke’s Politics of Moral Consensus (Cambridge University Press, 2005) and Joy for the World: How Christianity Lost Its Cultural Influence and Can Begin Rebuilding It (Crossway Books, 2014). He has written numerous articles in peer-reviewed academic journals as well as in popular publications such as the Washington Post and the Chronicle of Higher Education.

Greg Forster, Ph.D.


Greg Forster (Ph.D., Yale University) is a Friedman Fellow with EdChoice. He has conducted numerous empirical studies on education issues, including school choice, accountability testing, graduation rates, student demographics, and special education. The author of nine books and the co-editor of six books, Dr. Forster has also written numerous articles in peer-reviewed academic journals, as well as in popular publications such as The Washington Post, The Wall Street Journal, and the Chronicle of Higher Education.

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