The Billionaire Boys Club

In her book last year, “The Death and Life of the Great American School System”, Diane Ravitch dismissively described the wealthy philanthropists who are bankrolling various efforts to improve the otherwise taxpayer funded school system as the “billionaire boys club”. She argues that the likes of Bill Gates, the Walton family (heirs of the founder of Wal-Mart) and Eli Broad have failed to improve America’s schools system, even whilst wielding considerable anti-democratic influence within it. As she put it in one interview, when asked about her thoughts on the role of philanthrocapitalism: “The power and influence of those foundations challenges democratic control of public education. Are their market-based policies working? It all depends on what one means by ‘working.’ If it means raising test scores, the evidence is not conclusive. If it means strengthening public education, the answer is no.”

We profoundly disagree with Ms Ravitch’s analysis, which is delivered with all the zealotry and irrationality of a recent convert; until recently she had been one of the leading advocates in policymaking circles of many of the reforms she now denounces. At times, her criticisms border on the paranoid, such as her likening of Wal-Mart’s reputed habit of driving out small retailers from communities to the Waltons’ funding of small charter schools that take on the entrenched public-sector school monopoly, apparently as part of some sinister capitalist conspiracy.

Where Ms Ravitch has at least half a point is in saying that the philanthrocapitalists have failed so far to deliver the dramatic improvements in educational outcomes to which they aspire. Yet as we have said often, one of the strengths of philanthrocapitalism at its best is the ability to be courageous enough to risk failure, and to learn from things that do not work out as planned, in order to do better. This is exactly what Mr Gates did in his recent interview with the Wall Street Journal, in which he conceded that, with regard to his early initiative to encourage smaller schools: “The overall impact of the intervention, particularly the measure we care most about—whether you go to college—it didn’t move the needle much.” His response? To fess up: “We didn’t see a path to having a big impact, so we did a mea culpa on that.” And to move on, finding other ways, as the article puts it, “to leverage private money in a way that redirects how public education dollars are spent.”

The Walton Family Foundation, meanwhile, is also engaging in leverage by investing in growing one of the best examples of social entrepreneurship in education, Teach for America. On July 27th, it announced a gift of $49.5 million over three years that will help double the size of its corps of recent graduates who spend time teaching in some of America’s toughest schools. Providing core growth capital to successful socially entrepreneurial start-ups is an important trend in philanthrocapitalism, following in the footsteps of examples such as the Omidyar Network’s equity stake in Endeavor and the big multi-year grant by George Soros’s Open Society Institute to Human Rights Watch.

As for Mr Broad, the academy to train school principals in New York that he seed-funded before it was, once proven, taken on by the city, can claim an increasingly impressive list of alumni. One of its graduates – and a former Gates Foundation staffer – is John Deasy, who is now in charge of reforming the school system in Los Angeles – which is about as tough a task as there is. Matthew interviewed him on a panel (view here) at last week’s Imagination Summit at the Lincoln Center, which focused on how to put creativity at the heart of education. He is extremely impressive. How he performs in LA will be a key test not just of whether we or Ms Ravitch is right about philanthrocapitalism, but of whether the ‘Great American School System’ can actually be made fit for purpose.

Anyone doubting how tough a challenge this is should read the recent article on “The Failure of American Schools” by Joel Klein, who until recently oversaw the school system in New York, arguably the most intensive focus of philanthrocapitalistic innovation in American education during the past decade. (We last saw Mr Klein on TV, seated behind his new employer, Rupert Murdoch, as he testified to British MPs about the phone hacking scandal at News Corp; it is testimony to how tough reforming schools is that, compared to when we saw him in his old job, he looked quite relaxed!)

Mr Klein notes that all these efforts in New York did achieve some success: “what Robert Schwartz, the academic dean of Harvard’s education school, has described as ‘the most dramatic and thoughtful set of large-scale reforms going on anywhere in the country,’ resulting in gains such as a nearly 20-point jump in graduation rates.” Yet, he continues, “the city’s school system is still not remotely where it needs to be.”

As Mr Klein concludes, and the “billionaire boys club” seem to understand better than the likes of Ms Ravitch, “Time is running out. Without political leadership willing to take risks and build support for ‘radical reform,’ and without a citizenry willing to insist on those reforms, our schools will continue to decline. And just as it was with Detroit, the global marketplace will be very unforgiving to a populace that doesn’t have the skills it demands.”