August 9, 2012

My friend Nik recently sent me a PandoDaily article written by Francisco Dao entitled Looterism: The Cancerous Ethos That Is Gutting America.

He defines looterism as the “deification of pure greed” and says:

The danger of looterism, of focusing only on maximizing self interest above the importance of creating value, is that it incentivizes the extraction of wealth without regard to the creation or replenishment of the value building mechanism.

I like the term, I think I’ll use it. And it made me think of this recent Bloomberg article about private equity and hedge funds getting into the public schools space. From the article:

Indeed, investors of all stripes are beginning to sense big profit potential in public education.

The K-12 market is tantalizingly huge: The U.S. spends more than $500 billion a year to educate kids from ages five through 18. The entire education sector, including college and mid-career training, represents nearly 9 percent of U.S. gross domestic product, more than the energy or technology sectors.

Traditionally, public education has been a tough market for private firms to break into — fraught with politics, tangled in bureaucracy and fragmented into tens of thousands of individual schools and school districts from coast to coast.

Now investors are signaling optimism that a golden moment has arrived. They’re pouring private equity and venture capital into scores of companies that aim to profit by taking over broad swaths of public education.

The conference last week at the University Club, billed as a how-to on “private equity investing in for-profit education companies,” drew a full house of about 100.

[I think I know why that golden moment arrived, by the way. The obsession with test scores, a direct result of No Child Left Behind, is both pseudo-quantitative (by which I mean it is quantitative but is only measuring certain critical things and entirely misses other critical things) and has broken the backs of unions. Hedge funds and PE firms love quantitative things, and they don’t really care if they numbers are meaningful if they can meaningfully profit.]

Their immediate goal is out-sourcing: they want to create the Blackwater (now Academi) of education, but with cute names like Schoology and DreamBox.

Lest you worry that their focus will be on the wrong things, they point out that if you make kids drill math through DreamBox “heavily” for 16 weeks, they score 2.3 points higher in a standardized test, although they didn’t say if that was out of 800 or 20. Never mind that “heavily” also isn’t defined, but it seems safe to say from context that it’s at least 2 hours a day. So if you do that for 16 weeks, those 2.3 points better be pretty meaningful.

So either the private equity guys and hedge funders have the whole child in mind here, or it’s maybe looterism. I’m thinking looterism.

  1. David Austin
    August 9, 2012 at 7:52 am

    http://www.edsurge.com/ provides much news of ed-looterism.


  2. August 9, 2012 at 7:58 am

    Thanks, I just signed up.



  3. August 9, 2012 at 9:02 am

    I am against looterism. However, I do think that educational technology, in general, is a good thing. I do not believe that educational technology can replace traditional education (e.g., the recent fascination with MOOCs). However, I have seen for myself that well-designed course software, in conjunction with lectures and one-on-one feedback, can improve student performance. If private companies can profit by designing better course software (as opposed to profiting by monopolizing the market, as with traditional textbook publishing), then I feel that is fine.


    • Lenore Cowen
      August 9, 2012 at 9:44 am

      People need to realize, that part of the reason you are seeing such push-back against the idea of online courses and educational technology is that while YOU would never use it as a perfectly made fig-leaf for looterists, they and the rest of us can sense they can sell it as a fig leaf that will let them go out and loot, i.e. demo a whole bunch of shiny computers, install software that no one fixes when it breaks, fire lots of teachers, claim you are delivering more education and lower costs, leave with the money. While I applaud open courseware, Khan academy, etc. understand that the people who are griping are often on the ground being faced with real danger of looterism. They will take your words off your blog and quote them out of context in shiny powerpoint presentations to school committees. Right now, budgets are tight, and public school districts are all being asked to solve the magic problem: educate more kids, better, under more difficult circumstances, with less money. Under these circumstances, a snake oil salesman, particularly one with the “we can do it with technology” fig leaf, is just too tempting to believe. We need to resist both the snake oil, and the bad rap that the snake oil salesmen are going to give to online education, because in the end, I agree with you, if we figure out how to do online education right, it might truly help! But the looterists are circling, and they too can sense the promise of this promise..


      • August 9, 2012 at 9:55 am

        I completely agree. I am against opportunists who are just trying to exploit a bad situation. However, if educators and others with an interest in good education (i.e., all others) do not take the lead in trying to identify the good educational technology and find appropriate uses in coordination with traditional education, then of course that will only make it easier for the opportunists. Among the math professors I know, most would prefer to never think about educational technology, and that is a big part of the problem.


  4. Anne
    August 9, 2012 at 9:13 am

    I totally agree with you. Looterism is rampant in our society. It has taken four decades for this destructive philosophy to penetrate our society’s thinking and to wreck havoc with our economy. I live in a suburban New Jersey community which is economically diverse from poor to middle-class. Our high school graduates range from those admitted to top tier colleges to those directly entering the work force. I was employed as a School Social Worker in a neighboring middle to upper middle class school district with a small pocket of poor families. There are similar school districts throughout New Jersey with a few under performing school districts in very poor communities. Our Governor immediately attacked our schools as troubled and blamed it on greedy teachers and self-serving unions. He completely negated the fact that New Jersey Public Schools have been highly-ranked for many years and that the troubled schools were in very poor communities. He ignored the facts that the extreme income inequality within our state factored more on school performance then the teacher’s unions. What was his solution? He would save the schools through privatization and eliminating collective bargaining for the education unions (actually associations). The Governor wanted to dismantle functional school systems throughout New Jersey until some of his Republican suburban voters began to push back on charter schools in their districts. It was a case of ‘not in my backyard’. He is still pushing private charter schools as his solution in poor school districts.

    As someone who spent my professional life inside public education, the majority of teachers truly love their jobs and want their students to succeed. Because the work is stressful, difficult, and increasingly paper intensive, I saw both young teachers and senior staff leaving the profession. I saw young teachers leave because they couldn’t do the job which is one factor in why 50% of new teachers leave the profession within five years. People complain about tenure. It allows ‘bad’ teachers to remain in their teaching positions and they ‘slack’ off and lose their motivation once they get tenure. They push the idea that ‘money’ acts as ‘motivator’ just like in the private sector. This is based upon the faulty argument that money is what motivates others instead of the true motivator which is autonomy, love of teaching, and contributing to the betterment of society. I worked with some great teachers and they didn’t do it for money. They could have gone to the private sector and made much more money, however, they saw value in their work. They enjoyed working collaboratively with others. This is something that ‘looterics’ can’t even imagine.

    What truly baffles me is why so many low-middle and middle class voters would vote for Mitt Romney and others who propose cutting social programs while further reducing taxes on the wealthy? It simply boggles my mind that so many of the people who were negatively impacted by government policies that resulted in the deregulation of the financial sector which led to our current economic disaster in the USA and Europe; tax policies that rewarded shipping US jobs abroad, cut taxes on investment income that enabled people like Mitt Romney, hedge fund managers, investment bankers, CEO’s to receive the majority of their income through compensation taxed at 15% to 0%, if they used special tax loopholes designed just for them; global corporations to legally keep their profits off-shore at 0% taxes; target decent-paying USA jobs particularly union and public sector jobs and health/pension/sick days/vacation time as the source of our economic difficulties. They can’t see that ‘trickle-down’ economics is nothing more then a con-game to distribute money and power from the middle to the top. The bottom has never had the power and, now, the 30% to 99% are joining their powerless ranks unless they wake up to the real facts that the top 0.001% don’t need them and won’t give up their power unless they are pressured to do so by the rest of us.


  5. JSE
    August 9, 2012 at 10:21 am

    “pseudo-quantitative (by which I mean it is quantitative but is only measuring certain critical things and entirely misses other critical things”

    I don’t like this definition, which applies to EVERY quantitative measurement of the human world. All measures and measurers miss critical features, but some are upfront about that fact and others try to hide, deny, or minimize it.


    • August 9, 2012 at 10:23 am

      Welcome to reality! I don’t like it either. Models, otherwise known as quantitative measures, are the newest, fanciest way to hide stuff you don’t want to think about in a place nobody can understand.

      But I’m open to different terminology if you’ve got something to offer.


      • K
        August 9, 2012 at 12:06 pm

        The way to earn the title ‘quantitative’ rather than be relegated to `pseudo-quantitative’ is to be clear and explicit about what you’re measuring.

        The post below, from a favorite blog of mine, discusses ‘the decline effect’; i.e. that failure of new scientific results to hold up over time goes beyond what you would predict based on statistical reversion to the mean. Roughly speaking the blogger argues that this is due to overstatement of early results, especially when they are aggregated and re-reported.

        In K-12 education this manifests itself as the intellectual sleight of hand that takes us from ‘scoring higher on the standardized math test’ to ‘better at math’ and ‘getting a better education’.



      • JSE
        August 9, 2012 at 2:13 pm

        “Batting average,” for instance, is something that would meet your definition, but which I wouldn’t call pseudo-quantitiative — it misses lots of critical features of a hitter’s performance, but it is honest and transparent about what kinds of things it measures and what kinds of things it doesn’t.


  6. SagittariusA
    August 9, 2012 at 3:07 pm

    But wait.

    According to the Bloomberg article at least, these private vendors will supply school materials, lesson plans, and study aids only, designed largely to help schools satisfy government-mandated test results.

    The means will be outsourced, the ends remain in our hands.

    Venture capitalists won’t set the curriculum, determine which subjects students should focus on, or establish testing requirements.

    So will the private sector teach to the test better? Maybe it will, actually. The real question, I guess, is whether the ends are correctly chosen.

    Take DreamBox as an example. DreamBox won’t have a say in what students focus on and learn; it will (supposedly) help them learn what the government has established they should learn in each grade. It won’t alter the educational path it will just speed movement along the path, if it actually even works.

    Problems might arise, of course, when these vendors start lobbying the government for changes in the curriculum that benefit their products, i.e. more of a focus on math problems that DreamBox helps with and less focus on art or something like that.

    That, no doubt, is disconcerting…


  7. Micah
    August 10, 2012 at 8:44 pm

    I wouldn’t mind letting the PE guys take a turn at it, as long as they got appropriately randomized kids and didn’t get a single dime of compensation until 5 years after their first kindergarten kids have graduated from high school and are educated and employed.

    But not if they have an opportunity to make profits next quarter, no way.


  8. H. Alexander Ivey
    August 11, 2012 at 7:29 am

    “So either the private equity guys and hedge funders have the whole child in mind here, or it’s maybe looterism.”

    Since when does PE and Hedge Funders have anything more than their own, personal, private, renumeration in mind? Don’t confuse being nice with weakening your argument; the facts state that it is looterism, there is no “maybe”.

    Parting shot: The “system” isn’t broken, its “fixed”. Letting the money people get further involved will keep it that way.


  1. August 11, 2012 at 2:40 am
  2. August 11, 2012 at 2:21 pm
  3. August 13, 2012 at 4:59 pm
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