Education as Commodity: Corporate Dollars Seek to Redefine Public Schools

Jack Gerson May 5, 2007

By Jack Gerson and Steven Miller
“The merits of a marketplace model for public education have been among the most prominent themes in education policy discussions over the last two decades. The 2002 reauthorization of the Elementary and Secondary Education Act, popularly known as the No Child Left Behind Act (NCLB), has accelerated the trend toward private, for-profit activities in public education.” —Alex Molnar, “For-Profit K-12 Education: Through the Glass Darkly”

As the No Child Left Behind Act comes up for renewal, the New Commission on the Skills of the American Workforce is ushering in a new phase in the campaign to privatize public schools. The commission, whose last report laid the groundwork for NCLB, issued a book-length report December 2006:

“Tough Choices or Tough Times,” published by the National Center on Education and the Economy, is the definitive corporate statement on public education. The report calls for, among other things, making all public schools into “Contract Schools”; ending high school for many students after the tenth grade; ending teacher pension plans and cutting back on health benefits; introducing merit pay and other pay differentials for teachers; and eliminating the powers of local school boards by turning “public” schools to private companies to be regulated at the state level. These measures would cut the heart out of public education, severely penalize students and deal a heavy blow to teacher unions.

The report was funded by some of the world’s richest and most powerful entities — most notably Bill Gates — and puts forward the current consensus recommendations of U.S. corporations and politicians.


Bill Gates has decided to take charge of public education in the United States, whether we like it or not. New York University professor Diane Ravitch, writing in the July 30, 2006, Los Angeles Times, explained:

“With the ability to hand out more than $1 billion or more every year to U.S. educators without any external review, the Gates Foundation looms larger in the eyes of school leaders than even the U.S. Department of Education, which, by comparison, has only about $20 million in truly discretionary funds. The department may have sticks, but the foundation has almost all the carrots.

In 1990, the Gates-funded commission issued “America’s Choice: High Skills or Low Wages.” The influential report argued that the United States could compete in the global capital and jobs markets only if U.S. public education adopted a standards-based approach using standardized tests to enforce accountability of students and teachers. The NCLB followed, with its emphasis on highstakes testing and unrealistic targets for reading and math scores.

This approach has failed so miserably that it is losing much of its support. The National Education Association and American Federation of Teachers have grown increasingly critical; Democratic and Republican politicians are expressing their doubts. However, with the NCLB coming up for renewal in the now Democratic-controlled Congress, the folks who brought us the 1990 report are back with a new plan.


The latest 2006 commission report represents a broad bipartisan consensus of the U.S. corporate elite. It was funded by Bill Gates and the Gates, Hewlett, Casey and Lumina Foundations. The commission includes two former U.S. secretaries of education — Rod Paige and Richard Riley; a former U.S. Secretary of Labor; the heads of the New York City and Washington, D.C., public schools; the “president emeritus” of the Communications Workers of America; the president of the Urban League; the head of the National Association of Manufacturers; major corporate players (e.g., Henry Schatz, former CEO of Lucent); and other prominent politicians and academics.

According to the report, “we” (U.S. capital) need a highly skilled and creative work force to compete in the world market. The report admits that the emphasis on standards-based learning discouraged creativity in favor of rote learning. And, the new report says, the stress on educating for high skills is inadequate for the current global economy, where the only way to thrive will be to always be the first to come up with new technological breakthroughs.

This vision of a dog-eat-dog world is, unfortunately, an accurate portrayal of the dynamics of global capital. And, as the new report admits, automation and digitization have made it possible for U.S. companies to export almost all manufacturing and many service jobs, skilled and unskilled alike. But the folks behind the report are the very folks who shift capital around the globe to wherever labor is cheapest and profits are highest.

The commission writes:

“First, the role of school boards would change. Schools would no longer be owned by local school districts. Instead, schools would be operated by independent contractors, many of them limited-liability corporations owned and run by teachers. The primary role of school district central offices would be to write performance contracts with the operators of these schools, monitor their operations, cancel or decide not to renew the contracts of those providers that did not perform well, and find others that could do better. … The contract schools would be public schools, subject to all of the safety, curriculum, testing and other accountability of public schools.”

This is exactly the language of deregulation and “free markets” that gave us Enron, the pillaging of California by energy companies and the trillion-dollar savings and loan scandals of the early 1990s.

Basically, the commission wants to change state education codes to accommodate the kinds of exceptions and practices currently being piloted by charter schools. In effect, all public schools would be like today’s charter schools — run by private companies, with “flexible” hours, longer school days, longer school years, no teacher seniority rights, no pensions, and limited health benefits. With corporate interests so blatantly stated, the two labor members of the commission, Morton Bahr (Communications Workers of America) and Dal Lawrence (former president of the Toledo Federation of Teachers) wrote a short statement registering “concern” that “the design for contract schools can become an open door for profiteers.” They cite the example of Ohio, “where charter school legislation has resulted in almost universal poor student achievement, minimal accountability, and yet considerable profits for charter operators.”


Students would face severe progress tracking enforced by “benchmark” high-school exit exams to be administered in the tenth grade, created at the state level. The report calls for these tests to assess high school grade-level skills, not the middle school skills that are typically “measured” by routine high school exit exams. Students who do poorly get tossed out of school. The commissioners argue that students can retake the tests any number of times, so if they are really motivated they may eventually pass, albeit years later and, essentially, on their own.

Students who do well can go on to university. Students who do okay go to community college or technical school. The possibility is left open for some students to stick around high school for another couple of years to prepare for university.


States supposedly will increase teacher pay at the expense of pensions and health benefits. The report argues that teacher compensation is “backloaded” by being heavy on benefits and light on salary. Rather, the commission favors “frontloading” or increasing the salary while eliminating pensions and cutting health benefits.

This will penalize veteran teachers and eliminate traditional defined-benefit pensions, accelerating the already unacceptably high teacher turnover rate, which is especially destabilizing to inner-city schools and communities.

The report’s underlying assumptions reveal the typical “bait-and-switch” public policies that have ruined public access to health care, created the North American Free Trade Agreement (NAFTA) and led to the war in Iraq.

The significance of the report is that the march toward privatization of public schools is now completely out of the closet. Evidence of this shift is already seen across the nation where the public schools of New Orleans were almost completely privatized, the mayor of Los Angeles favors charter school corporations and New York City Schools Chancellor Joel Klein sits on the (private) “Skills Commission.”

Few people are aware that the great state university systems, including publicly funded institutions like the University of Illinois, the University of California and Michigan State were essentially privatized by corporations in the 1990s. Virtually all of them now receive the majority of their funding from “partnerships” with corporations. Now corporations are drawing a bead on the country’s school system for children, for people under 18 years old.

The privatization of public education already results in the transfer of tens of millions of dollars in public assets into corporate hands without a discussion of compensation or, still more fundamentally, whether society should allow public education to fall into private, corporate hands.

Public schools originally arose in opposition to the child labor of the 1830s, where the only children who attended school were those whose families could afford it. What will happen when schools are completely privatized and only the rich can afford to give their children an education? When exactly did we abandon the vision that guaranteed everyone an equal, quality public education?

The executive summary of the New Commission on the Skills of the American Workforce report is available online at skillscommission. org. A longer version of this article appeared in Left Turn (

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