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private profit, public good?
At the end of the day, the controversy over Chris Whittle and Edison Schools comes down to one question: Should for-profit companies be in the business of running public schools? Here, in excerpts from their FRONTLINE interviews, Edison's Whittle and Benno Schmidt, education reformer Ted Sizer, economist Henry Levin, and analyst Steven Wilson address the debate over Edison Schools and the impact of the for-profit privatization movement on American public education.


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sizer
A professor emeritus at Brown University and former dean of Harvard's Graduate School of Education, he is the founder of the Coalition of Essential Schools, founding director of the Annenberg Institute for School Reform, and former headmaster of the Phillips Academy in Andover, Mass.

Do you have a position on this idea of running schools for profit?

Yes. I'm opposed to it. Simply because it puts the investor at the head of the list, and under a system of compulsory education ... the children should be at the head of the list. ...

When a state requires so much of a citizen, then that citizen's claim on the resources comes first. [And the for-profit model] puts the investor first. ...

I'm not against private business being involved in public education. If I was, I wouldn't be buying textbooks from the likes of Houghton Mifflin and the rest. There are plenty of ways that private for-profit industry can support public education. In many, if not most cases, they do it wonderfully. But the notion that the whole system is, in fact, driven, where the investor is the one most protected, that's something different. ...

What about Whittle's own argument that the public education system doesn't do a very good job for an awful lot of kids?

Oh, I agree with him. How could I not? ... But the question for me was, how do you so change the incentives in the public sector so that these hierarchical bureaucracies will do a better job? And I also have long been a proponent of public school choice. And a lot of people say, "Well, that's just privatization in different garb." I don't think it's privatization in different garb. ...

So if Chris Whittle took you to an Edison School that's functioning well, you'd say that school should be shut down?

I say keep it a private school. Great private school. What's wrong with running private schools? If you think you can run a terrific school, blessings on you, but don't expect it to replace those schools which are run by the public. ...

Do you have some sympathy for what Chris Whittle's trying to do?

I'm all for choice. And he's arguing for choice. I'm all for better-designed schools. He's all for better-designed schools. But many of my friends in the public sector are vigorously for choice and for better-designed schools. So, yeah, we have a lot in common. It's just when you set it up so that the children are at the head of the list that there is a profound difference.

And you think public education puts children at the head of the list?

Philosophically, they should. Are they doing it now in many communities? No. But the answer to that is not to drown the public sector and replace it with a for-profit sector. I think the danger's in the for-profit sector. Plenty of examples in other lines of for-profit work suggest that with all its problems, the public system, publicly derived, publicly led, with all its problems, is the better.

You've described the Edison Project as "one-size-fits-all education." It's about standardization and scale.

Oh, yes. .... You know, I'm no businessman, but I've run schools. And the only way you're going to make money on schools is if you have one system, one text, one routine, one school design. That's the way you make money. It's scale, scale, scale. ...

Now, I happen to believe that no two schools that I most admire ever plan alike. Good schools are very much a reflection of who's in them and the community in which they rest. And the notion of a cookie-cutter plan is antithetical to what I have observed as worthy. ...

Whittle says, "Look, of course, our investors matter. But kids matter more because if we don't have kids, we go out of business."

Your investors do not want you to go out of business, Chris. And they're gonna hold your feet to the fire. ... When push comes to shove, he's in a for-profit business. How can he pretend he's not? ...

Is Chris Whittle a symbol?

No, I don't think he's a symbol. If he's a symbol, if you force me into using that, he's a symbol for the paralysis of the public sector. It should be easy to compete with somebody who has to ... get a profit for investors. I mean, hey, you know, that's one arm tied behind his back. ... But the public sector is, in many cases, paralyzed. And that's the shame. So if reform is needed, it is reform within the public sector. ...

Do you want Chris Whittle and the Edison Project to fail?

Oh, I don't know that that's a world-shaking decision one way or the other. I'm just disappointed in, what I perceive to be, its lack of educational imagination. It is not a wonderful intellectual burr under the public school saddle. ... There are pilot schools in Boston, there are all sorts of interesting schools in the city of New York within the public sector, that are really a burr under the saddle. That's where the energy is. It's in the public sector. And it's small, you know. It's constantly under pressure ... but it grows every day.


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benno schmidt
Former president of Yale University and former dean of the Columbia University Law School, he is the chairman of Edison Schools.

How did [Chris Whittle] convince you [to join Edison]?

Well, he really argued for the paramount importance of trying to do something good for inner-city public schools. And by paramount, I mean made the case, which I think is right, that there's no more important undertaking in our society. I don't just mean for educators; I mean for everybody. ...

I ultimately decided that it would be worth the risk. A big risk, I understood. It would be controversial, I understood. A lot of people would think, "Crazy idea." That I understood. But I thought that the goal was so important and the potential for success was high enough to make the risk worth taking. ...

Chris talked about the organized opposition to Edison, as Edison's gotten bigger, it's "We can't let this succeed." What is your sense? Why is there fierce opposition to Edison?

Well, I think the opposition operates on a lot of different levels. Obviously public education in the United States is a massively large undertaking. Hundreds of billions of dollars a year are devoted to it. And there are lots and lots of people and lots and lots of organizations who benefit from the current way that public education is structured. ...

And moreover, when you have a status quo that operates as a kind of monopoly -- not a pure monopoly, but in many respects public education is a monopoly; people don't have an alternative in many cases to going to public schools -- you know, I can't think of a monopoly in history that's willingly given up its power or invited in competition. And I think the first thing that many people [in public education] see when they look at Edison [is] competition, and they don't want that.

I think the opposition, though, goes way beyond selfish concerns. ... I think they want to do the right thing. But folks who have spent their lives in public education are people who, by nature, believe that the best possible outcomes are going to come through a political and a bureaucratic process, not through a market-driven process, where people are given choices and where choices are exercised to force excellence. ...

I think the people in education, not all by any means, tend to be people who have very little experience with private markets. They believe that politics and planning produces better outcomes than more of a market situation where people are free to make choices.

And that's been a fundamental philosophical debate in our country and indeed around the world. It's the debate of the last half century.

Chris talked about being demonized. To what extent is Chris Whittle a lightning rod?

... I think anybody who was identified with Edison would be a lightning rod. I think that a private for-profit entity in education is going to be viewed with skepticism if not downright hostility ... by a lot of people who believe that a business only cares about making profits, and therefore we don't care about the kids. ... Whereas, in their hypothesis, people who are not in it to "make a profit," they care about the kids. Now, my own view is that that is a primitive conception of how markets work, but I do think that's a very sincere view of a lot of people. ...

When the discussion was serious about us possibly taking over the entire Philadelphia school system ... I think people who were and always have been our opponents, and maybe some people on the fence, woke up and said, "Wait a minute. This isn't just about a few schools in Kansas City and a few schools in Wichita or wherever. This may be about a fundamental, structural change in the whole political foundation of public education." ...

There are nearly 100,000 public schools in the United States. We're now in 130 some or something like that. We're tiny in relation to the whole. We could grow like gangbusters for 10 years and we'd still be tiny in relation to the whole. But the reason there are more stories about us than anything else happening in education reform, and more controversy, is, I think, because of the perception that potentially we represent a kind of tipping point away from the traditional system, that's controlled by politics and the bureaucracy, toward a system that's more about choice and markets, where parents are going to have much more power. And that is a big change. It involves huge vested interests, and the whole Philadelphia discussion just racheted up the challenge that we represented. ...

I think it's quite possible that I'll sit in my rocking chair and say to myself "Darn it all, we did a good enough job educationally, we should've succeeded as a business. We should have been able to take Edison to 1,000, to 2,000 schools, to really make a structural impact on this huge system, this huge thing of public education." But to me, it's always been the case that Edison needs both. It needs both educational success and it needs business success. You know, one without the other, it just doesn't do what we set out to do. We set out to make a difference, not to prove that, hey, we can come up with a curriculum that works. I mean, a lot of people have done that. No one has ever, at least in the modern era, come up with a scale solution to the problem of underperforming public schools.


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levin
A professor of economics and education at Teachers College, Columbia University, and director of the National Center for the Study of Privatization in Education.

[How was the idea of privatization sold to the public]?

Well, first of all, there was a lot of frustration with the quality of American education, particularly in the inner cities. And so it didn't take much to say, "Let's look for another solution". ...

I think in terms of Wall Street, the idea was that business can do in education what it appeared to be doing at that time in health care and that it would have a great deal of support from those who were in power at the time, which were people who, at many levels of government, were sympathetic with deregulation and moving to the private sector. ... This was an age in which the view was that government had gotten too large, that government was generally inefficient, that it serves only itself and its own participants and employees and that business has a very different set of values. ...

At the time, exactly what did business say that it could bring to the table that public employees could not?

Well, first of all, it said that it could bring new ideas to the table. That it could basically be an incubator of ideas; that in order to succeed it would have to bring new ideas to the table; it could put research and development into education, which perhaps the public sector either didn't know how to do or didn't have the funding to do; that it could put business practices in there which would lead towards much greater efficiency; that it would rethink how schools operate, something that it argued had not been done in generations. There was a general mystique that business could do what government could not do. ...

It has wonderful sales potential, almost a do-good effort in some ways.

Yes, yes. I think that a lot of business people saw this [as] doing well by doing good. "Doing well," in terms of profitability, by "doing good" for society. And that was a strong selling point. The idea is that by doing this, we're doing, if you don't mind my saying so, God's work. It's a kind of sacred duty and the wonderful thing is that we can still make a decent profit out of doing good. ...

Now, at the time, how radical of an idea was [Edison]?

It was a very radical idea. The notion of establishing a kind of corporate presence in education, in terms of sponsoring schools, owning schools, running schools, was really different than any for-profit intervention in the past.

What did you think of it? Forget about what you know now, but at the time, what did you think of it?

Well, I was always skeptical of the economic model underlying it. We never did see ... a clear picture of why these particular schools would succeed, of why they would compete effectively in the market out there. We never did see a clear picture of what would make these schools different. ... And eventually, when a schooling model emerged ... it was characterized by a lot of existing programs out there that any school could adopt. ...

Today the climate is very hostile. Has it always been that way?

I would say that today, actually the climate is a bit less hostile in many areas. If you go into some of the smaller school districts, the attitudes towards privatization -- particularly for one school, or for a charter school, in that particular geographic area -- it's pretty well accepted that there will be educational management organizations, for profit, involved in the business. ...

So I think that the hostility comes because in some of the larger cities, the people who are going to be affected, the clientele now, have not been asked for their input. That is, these solutions have been imposed on them. And that doesn't fly very well. ...

But I think that there's a larger issue, and again, this faces the entire industry, and that is, education's a tough business. This was something that simply wasn't recognized by an excited investment community. They saw this simply as another business, and if this business were taken over from the government, it could be done more efficiently. ...

Were folks na‘ve about this?

I think that they were. I think that folks were na‘ve about this. I think that they got carried away, frankly, by a lot of the rhetoric out there, about how poorly schools were doing, number one; that the reason they were doing poorly was because of quote, "the government monopoly," which you hear again and again in the investment community; and that if only you could break this open, and get corporate capital in there, you would have success. That it simply is a matter -- without looking at the details, without looking at what the product was, without looking at the economic assumptions behind the model -- that is, there was a business plan, but whether the business plan bore any relationship to the reality that was already evident among those who had studied education, that was another matter.


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benno wilson
Currently a senior fellow at the Center for Business and Government at Harvard University's Kennedy School of Government, he is the former chairman and CEO of Advantage Schools.

At the time that Chris made this announcement, how radical of an idea was it?

I think it was and is an enormously radical idea, the idea that private-sector entrepreneurs could run public schools and run them to a higher standard. The idea is perhaps no less radical now than it was then. And that's because private involvement in public schools pushes people's buttons. For whatever reason, it's a sensitive topic and arouses strong feelings.

You've said the debate hasn't really changed. Sounds the same as it did seven or eight years ago. Why?

Right. I think the debate is frozen. It continues in essentially the same form with the same rhetoric, the same ideas, as we heard 10 years ago when Chris Whittle was getting underway. The right argues that competition and innovation and the potential for private reward is precisely what this calcified institution of public education, particularly urban public education, which performs the most egregiously, needs. And, of course, the left thinks that the whole idea is anathema. The last thing we want is the one institution that is untouched by market forces to be invaded by private sector entrepreneurship. And that debate remains today in essentially the same form.

What we haven't done is step back and said, "Look, it's not a new idea anymore." We now have five years of actual experience. So let's ask ourselves: Is this working? What do we know about this? What's happening out there with the 10 or so companies that are engaged in this work? ...

And I think it's too early to answer definitively whether these companies are operating better schools. But I think we can say that there are many important ideas that they're bringing to public education, and particularly to urban public schooling, and that they have advanced the debate generally. In particular, Edison's engagement, Edison's bold promises, have spurred a real response from the existing public schools. ...

We interviewed somone yesterday who said, "I don't trust companies like Edison. Because ultimately, at the end of the day, the interests of investors will come before the interests of students." ...

It's a fallacy to see the interests of investors and the interests of quality as being opposed. ... This reflects the most astonishing misunderstanding of how markets and business function. ... In the case of Edison, if Edison doesn't deliver a product that is unequivocally better than the existing public schools, they will not retain their existing accounts, and they certainly won't be invited to manage other schools around the country.

So there is no tension between making profit and delivering quality. In fact, they're absolutely joined at the hip, in this industry, as in others.

It's also ironic that this is raised, because if we look at the case of Edison, the flow of money has been completely in the other direction. This has not been a case where public monies have gone to line Chris Whittle's pockets or anybody else's. Quite the reverse. It's been private capital that Edison has raised -- to the tune of probably close to $200 million -- that has flowed into public schooling and has benefited families and children.

And yes, one day that tide might turn, but it hasn't happened yet. And when it does, it'll be because Edison is demonstrably delivering a better product, and that means better-educated kids and satisfied parents. ...

What does it say about us that private companies have become a necessity in what should be a public responsibility -- that is, public education?

Well, we need to be more thoughtful about what we mean by a public education. We all have a nostalgic connection or equation between public education and the present delivery vehicle, if you will, of publicly staffed, essentially government-run schools. But let's think more deeply about what is public education. Isn't public education really something that is open to all, that is publicly funded, and that produces academic outcomes that are in the public interest? Educated children that are capable of taking their place in American life?

If we look at it through that lens, then we have to ask, is the present structure of government provision of public education the best way to reach those public goals? Or are there other definitions of public education, that might include private management of public schools, that might be far more effective at creating truly public schools? ...

[Edison and the other companies] are openly excoriated, openly vilified.

I think we have to ask, who are they excoriated by? They're not excoriated by urban parents who sign up to them in droves. They are not excoriated by the teachers who work in the them. They are excoriated, perhaps, only by the entrenched education interests who are powerful voices in American politics. ...

Parents who have no other options, whose only choices are between one underperforming school and another, are not going to quibble about the ideological question of public or private management. What they want is a school that works better and is safer. And if it's privately run they're going to go for it. ...


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Chris Whittle
Founder and CEO of Edison Schools.

Tell me why America needs Edison.

I think the country needs what Edison stands for. Whether it comes from us or from somebody else I don't think is important. … In a sentence, it's saying there's got to be a better way than what we are currently doing. We, as a society, have got to try lots of solutions, and we're one of those.

What's wrong with the way we do it now?

If you walked up to an airline counter, and they said, "Sir, 20 percent of our flights don't make it. Would you like a window or an aisle?" You'd go, "I'm not getting on this plane," because you would say those odds are unacceptable.

We have schools in America, that if they were asking the question, they would say, "Your child has an 80 percent probability of failure at this school. Which class would you like to be in?" Some people will get upset that I'm making that statement. That's a reality. We have large systems where 50 percent, 60 percent, 70 percent of all the children are well below what the states are saying are proficiency levels. We can't say that's acceptable. ...

Do we actually spend serious money to figure out how to improve an elementary school? As a society, we do not. We spend serious money to run the ones we have. We don't spend serious money to take them to another level. I said, "If we don't start doing that, our schools are going to remain" -- and you know the saying as well as I do -- "one of the only institutions that somebody would recognize if they came back from the 15th century."

I then theorized that the only way it was really going to work was if somebody came up with a national system of schools that could plow back dollars into research and development in the same way that other major economic entities do. We couldn't expect [states and school districts] to [make] serious R&D efforts, because they didn't have the scale to do that. ...

Let's say this in a slightly different way. Did we believe, particularly then, that American education was the most efficient sector in American life? I don't think so, and I don't think anyone else did, either. We read the newspapers, and particularly in urban settings, we knew that there were … significant amounts of dollars going out in ways that you might want to reconsider. I think we had a general belief that there may be a way to organize it in a more efficient method. ...

If you could [create a good school that didn't make money], would you do it?

I would do it, but I would've failed. [Earlier you asked me], "Would you rather make money and not have a good school?" … The answer to that one is easy. I'd rather have a good school and not make money. But if that happens, I've failed.

Why?

Because one of the points of this is that so long as education in America requires a vow of poverty, we are not going to see education in America go to where it needs to be. That is too much to ask of the people in education. ... We've got to make sure that education is rewarding. Part of what's going on here is to do that. ...

What do you mean, "more rewarding?" It has to be profitable, or it can't get better?

No. The one thing I want to make very clear is -- and I've said this a hundred times -- I do not believe in one way to do education in America. I believe that diversity is critical, and that competition between many different ways is critical. I think that, in fact, one of the big problems of American education is that we have had one way. … I do not believe that the only way out of this is for America to be for-profit education only. I think that's one way through this thicket, and there may be many others. ...

[Is there] a hostility that goes back to Chris Whittle, or making money off our kids?

I actually think the making money is a smokescreen. It's not a real criticism. Seriously. If it were, why aren't they throwing everyone else out of a school that makes money? The textbook manufacturers, the computer manufacturers, the milk makers, the uniform makers, on and on and on and on. Why are they just picking on us? I think the reason is that we're not on that edge of the school. We're about the school, and that causes people to be threatened. …

Ted Sizer, certainly a leading reformer, says that your model is inherently wrong; investors will always come first.

I don't think so. If that's true, then there's no math book out there that works. There's no computer that works. There's no school bus. All of those were brought by for-profit entities that are balancing the services that they're providing and the service in the interest of their shareholders. We're no different. Education is filled with successful examples of companies providing services that educators like.

So when Sizer says, "Chris Whittle, when push comes to shove, is going to put investors first ahead of kids," [what do] you say?

I would disagree with that. I would say that we can balance those interests. And by the way … there is a tension between multiple interests that exist in American public education. It's not that we are the first time there's a tension that exists. The question is, can we possibly do it in a way that actually winds up making it work better? The academic data would indicate that we are, and I think that's the point.

So when someone says Edison is inherently immoral, [what do] you say?

I'm saying, if faced with this decision, which would that person choose? I'd rather have a better school that is managed by a for-profit company, or I'd rather have a worse school that's not. If they'd rather have a worse school that's not, that is the worst of being an ideologue. …

If you ask a bunch of educators, "If your legacy could be starting dozens of schools like Montebello," ... they'd say, "I would have had a great career." But, for you, it's starting good schools and making money. One without the other is not sufficient?

Definitely, one with out the other is not sufficient. I would add a third ingredient in there: leaving behind a system that continues and grows and gets better and better and better. It's not just about the individual schools; it's about that entire institution that is being constructed. If that doesn't remain and go far beyond what I may have originally had in mind, then there is no legacy, in my view.

So it's a system of good schools that continues? ...

Yes. That are good academically, and good financially.

 

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published july 3, 2003

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