School Inc. Episode 3: Forces and Choices – Full Video


In the modern world, we ride the crest of a wave. Every day, innovators discover new and better ways of meeting our needs. The greatest innovations are routinely replicated worldwide, except in education, which has remained stubbornly at anchor while the rest of the world has sailed past it. That modern world is growing at an unprecedented pace. India now has more children than any other nation on earth and so education has become a priority. Here, even though public schools are free, many poor Indian parents pay to send their children to private schools. Their reason is clear. I spoke to one father who had transferred his daughter from the private to public and now back to private. He told me, “If you go to a market and are offered free fruit and veg, they’ll be rotten. If you want fresh fruit and veg, you have to pay for them.” And In Sweden, a handful of schools are breaking the mold and turning modern trends upside down in pursuit of educational success. Well, when you’re looking at how many students want to get access to our school, it tells me that we are doing something right. And in New Orleans, local educators think they are doing something right by investing time and resources into the charter school movement in the Big Easy. Join us as Andrew Coulson explores the challenge of replicating educational excellence in School Inc. Here in Chile, thirty years after the passage of a national school voucher system, students out-perform those in all other Latin American countries, and private schools remain a vital part of the system. But what appears to have worked in Chile may not work elsewhere. There is one other place where we can see it working. Sweden! Ten years after Chile reformed its education system, Sweden followed suit. All private schools are now fully tax-funded, and parents can easily choose between these so-called “free schools” and the local public schools. Before the program began in 1992, private schools enrolled barely 1 percent of students. Today that’s up to 16 percent… and still rising. But, are Swedish test scores going up as fast as Chile’s? Actually…they’re falling! Swedish math scores dropped like a rock from 1995 to 2003, and continued to fall, though more slowly, after that. Here’s the thing, back in 2003, public schools still enrolled 96 percent of students, so it’s the public schools that dragged down the national average. So, the only way that Sweden’s school choice program could be responsible for the country’s academic collapse is if competition from the few new private schools sent public schools into a tailspin. But, according to the latest research, the opposite is true. The more private sector competition Swedish schools face, the better they perform! Okay…then what has been hurting public school achievement? It’s a tough question, but here’s one possible cause: the share of college students applying to teacher training programs has plummeted over the past quarter-century, and their academic ability has fallen with it. Back in the 1980s, there were 10 applicants for every open space in Swedish teachers’ colleges. By 2012, there were so few applicants that nearly all of them were accepted. College admission in Sweden depends in part on a multiple choice Scholastic Aptitude Test. Guess every answer, and you’ll score about 20 out of 100. The average score for students in colleges of education was just 25 out of 100. Which means many of them scored worse than if they’d circled answers at random. But why have so many high achievers given up on teaching? It might have something to do with a dramatic change in the culture of Swedish schools. Reforms introduced in the 1980s and 90s deemphasized academics, and shifted control from teachers to students. Today, nearly half of all students in Stockholm report that their studies are regularly interrupted by their peers, who routinely ignore the teacher and chat on cell phones and social media during class. Both the public and private sectors have been affected by this cultural shift, but at least some of the private schools are bucking the trend. A network called I.E.S., or International English Schools, emphasizes academics in a calm, respectful atmosphere. Students must behave courteously, address teachers as Mr. or Ms., and follow a conventional dress code…all of which is illegal. But the principal seemed disinclined to knuckle under. Our schools believe in discipline in the classroom. Our schools believe in high expectations for the children. I say to our principals “We stand up for who we are.” We tell the parents, “This is what we expect.” We talk to the students also, “This is what we expect from you.” This is, after all, a workplace. And after all, you have a choice. If you don’t like our rules, there are places where you don’t have to abide by rules. Founded in 1993, I.E.S. now operates 24 schools, serving nearly 18,000 students with an additional 30,000 still on its waiting list. When you’re looking at how many students want to get access to our school, it tells me that we are doing something right, that we have the right people in place. Given that success, I asked Barbara Bergstrom if she thought the government should require other schools to emulate IES’s methods. I don’t think so because I believe it’s the choice that people are having that’s important. What we do is of great interest to a segment of the population. It’s not one size fits all. I think the issue of choice is the most significant one. And Swedish parents have a lot of choices. Another of the country’s popular chains, Kunskapsskolan, takes an entirely different educational approach. So we organize our subjects into steps and themes and all the steps and themes are found on the Learning Portal. And the Learning Portal is accessible to students, teachers, and parents. You can use it on any device from an iPad, or a smartphone, or from home, anywhere you are. So you can study French on the bus if you want to. Kunskapsskolan’s individualized model gives students considerable autonomy, but it doesn’t leave them unsupervised. As a teacher, I have three roles in Kunskapsskolan. I am a subject teacher. I’m a general teacher; I’m there for all the students. And also, I’m a personal coach. And I meet every student for 50 minutes a week. I think that our flexible way of organizing time and space gives me more room to create the different kinds of sessions that I think my students need. Like IES, Kunskapsskolan is expanding… even internationally. We have in Sweden about 40 schools and about 10,000 students. We started in London three years ago and, in London, we are now running five schools. And we are growing at the pace where we can keep quality. IES and Kunskapsskolan could hardly be more different pedagogically, but both are well-liked by the families they serve, and academically successful. And if neither model appeals, there are hundreds of other independent schools to choose from. But here again, not every good school grows. This is Individual High School. It scores well academically, its students regularly win awards, and it has a very illustrious list of alumni, a list crowned by Her Royal Highness, Crown Princess Victoria. But, like a typical American prep school, it has never grown beyond a single location. And the fact that it’s now part of Sweden’s school choice program hasn’t changed that. Why do some great schools add new locations in response to rising demand, while others don’t? Is there even a pattern? Well…I’ve got good news and bad news. The good news is that there is a pattern, and it’s incredibly simple. Yay! There is a single feature that separates independent schools that scale up from those that don’t. The bad news is that that feature… is the profit motive. Aww… Here’s the thing. Lots of people don’t like the idea of for-profit education. And if it isn’t widely accepted, it won’t be widely adopted. And great educational options will remain out of reach of millions of kids. While popular non-profit schools grow slowly if at all, their for-profit competitors form networks like IES and Kunskapsskolan. But there’s still another possibility: Maybe the correlation between for-profit status and growth is just a coincidence. Monthly ice cream consumption goes up and down with the murder rate, but there’s no reason to think that frozen treats actually make people stabby. Is there any reason to think that the profit motive actually causes schools to grow? Or, looked at the other way, does non-profit status discourage growth? The answer is risk. If new locations fail, they can drag the entire enterprise down with them. Donors to non-profits are unwilling to assume that risk. They give to sustain a tradition, not to jeopardize it. I believe that all entrepreneurs that succeed, they are being driven by the goal to change something. Profit is a receipt to show that you’ve done it in a successful way, but its primary aim is not, “Hey, let’s make lots of money.” The primary is to make sure to do something that people like. And if they don’t like it, we won’t make money. And that’s an important consideration that sometimes is forgotten. It really does seem as if the profit motive plays an essential role. But that’s just half the story. Entrepreneurs only earn a profit if they make good decisions. If they make bad ones, they suffer losses. To understand just how important that carrot-and-stick system is, it helps to look at a case in which the stick was missing. This is the Vasa. Launched in 1628, it is the oldest surviving ship in the world. Gustav Adolph the second, the Swedish king who commissioned it, spared no expense. It ended up costing almost 5% of the entire Swedish national income. Construction lasted over two years, and just a few months before the Vasa’s launch it was subjected to a routine stability test. Thirty crewmen lined up on one side of the deck, and then they ran back and forth across it in unison. But after just three iterations, the admiral overseeing the test called it off, because it seemed the Vasa was about to capsize. Naturally, the ship was redesigned and retested before being put into service… didn’t happen. Actually, the Vasa was launched as-is. And on its maiden voyage, it sailed 1,200 meters into Stockholm Harbor, heeled over and sank, killing about 50 of its crew. That crew, of course, did not include the admiral. He made his bad call from the safety of the shoreline. Entrepreneurs, on the other hand, go down with the ship. And that puts a limit on the amount of risk they’re willing to take. It also limits the amount of damage they can do if they’re completely clueless. Companies that consistently make bad decisions continually suffer losses, until they run out of money and credit, and fail. And when decision-makers don’t pay for their mistakes, they have less incentive to make well-informed decisions. That’s what led to the disastrous launch of the Vasa. The shipwright only had experience working with a single gun deck. The king decided he needed two. His Majesty also called for more and heavier cannons, and masses of elaborate oak carvings; all of which made the ship less stable by raising its center of gravity. Which raises an important question: was it really wise of the king to substitute his preferences for the judgment of the shipwright? We might well ask the Swedish government the same question today, with regard to schools. They aren’t telling educators they need more cannons or oak carvings, yet…But they are telling them how- and even if- they can do their jobs. For example, the government forbids teachers from grading their students’ work until they’ve reached middle school. It has also begun requiring all private schools to hire the graduates of its official teacher training programs, even though everyone admits that these programs are attracting the country’s weakest college students. The government even prevents new private schools from opening in places where it thinks they would attract too many students, out-competing the local public schools. In these and other ways, the Swedish government imposes its own decisions on schools without having nearly as much at stake in the outcomes, as the educators who actually run them. Like King Gustav Adolph and his admiral, the government officials are making their calls from the safety of the shoreline. Standing next to Sweden’s most famous preventable disaster, it’s hard not to think that history is about to repeat itself. If there were no regulations at all, wouldn’t some private schools try to take advantage of families? And wouldn’t the most likely victims be children whose parents had little schooling themselves? If so, we’d be most likely to see it in a place where private schools are serving a relatively disadvantaged population. I know just where to look! Here in India, a lot of schools are taking advantage of poor families. Back in 1999, a team of researchers made surprise visits to schools around the country. In village after village, they found one type of school that consistently had the worst facilities and the least learning. Most had leaking roofs, and barely any had drinking water. And if you’re wondering why anyone would pay for that kind of service it turns out there’s a good reason: they have to. The findings I just described are for public schools. I met this lady recently at a social gathering. And I said that, “Oh, so what’s been going on with you?” And she said, “Oh, I managed to get a government job. My life is set.” And I said, “Set in what ways?” She said, “Well, I’m never going to be fired.” “This is a job for life, and it pays me well. And I don’t even have to go.” And I said, “How does that work, you don’t even have to go?” She’s managed to find somebody a bit influential in the Department of Education, locally. And the guy has asked somebody to fill in her attendance every single day, so she hasn’t been to school for the last year-and-a-half since she was posted there. That’s not to say that all public schools in India are dysfunctional. There’s one network run by the federal government that’s very highly regarded, but spaces are limited and three-quarters of them are reserved for the children of government officials. But what happens to poor children who can’t get into an elite public school or afford an elite private one? That’s a question that British education Professor James Tooley found himself asking, when he came to Hyderabad on a research trip. So one day, I took an auto rickshaw from my hotel in Nilgiri Hills, a nice part of town, down to the Charminar, where I had read in my Rough Guide to India, the slums of the old city lay behind this “Arc de Triumph”, if you like, of Hyderabad. And I found something which changed my life. It was one of those wonderful moments where I found a private school, a low-cost private school, in those days charging the equivalent of about one U.S. dollar per month. I found one, and then a second, then a third…and soon, I found this federation of low-cost private schools. When Tooley revealed his discovery to other education experts and government officials, they were a tad…skeptical. They said, “Calm down, Tooley, calm down.” “What you’ve found…” – and I remember this – “What you’ve found is a couple of businessmen ripping off the poor.” “And anyway, it’s only happening in Hyderabad in India.” “We know about it. It’s a small thing.” And I thought, “Ripping off the poor?” “But that’s not what I have seen there.” “I’ve seen dedicated entrepreneurs who are running schools.” “They come in on their weekends, and run science fairs, and sports competitions.” When you see one or two schools in poor areas, you think, “Okay, this must be charity.” “Maybe the mosques are supporting them.” “Some N.G.O., some non-government organization is supporting them.” When you see 5, 10, 15, and you hear of 500 of these schools, you realize that can’t be the case. There has to be a financially-sustainable business model. I talked to a lot of parents and said, “You’re poor”, you know. “Why are you spending money on the private schools when the government schools are free?” I’ll never forget, one said, “In the government schools, our children are abandoned.” And sure enough, I went to see one of these government schools. And I’ll never forget this, 130 children sitting on the floor. It’s a government school just around the corner from here, 130 children, all bright-eyed, eager to learn, eager to welcome this stranger in their midst, doing nothing, abandoned. Dozens of scientific studies have now looked at these budget private schools in India and elsewhere. And what most of them find is that private schools are out-performing government schools that spend three or four times as much per pupil. But, higher quality isn’t their only appeal. Another huge factor is the language of instruction. India has hundreds of native languages. And the public schools in each state usually teach in the dominant local language. Private schools, on the other hand, almost always teach in English because that’s what parents want. And, it isn’t hard to see why. English not only facilitates communication between states. It’s also the international language of business, and international business has taken a keen interest in Hyderabad. During the 1990s, barriers to foreign investment lowered, and hi-tech companies flooded into the city. The explosion in hi-tech employment has generated new service and professional jobs in which English is also an asset. When I first came to Hyderabad, I was quite naive about these things. And I spoke to one of the first school proprietors, one of the first entrepreneurs I met. And he told me that the government inspectors, the education inspectors, come three, four, five times a year. I thought, “Well, that shows a degree of commitment on behalf of the government to educational standards.” But I soon found out that they… they came really to, to take the bribe. They were quite up front about it. They came, they sat in the office; they sat in a comfortable desk. They took the money; they didn’t even bother to look in the school. They had a nice cup of hot chai and off they went. The reason that government school inspectors are able to extort bribes is that these low-cost schools cannot afford to comply with the regulations. For example, the law demands that each school have a large playground. But in the dense slums of Hyderabad, spaces like that are hard to come by. Land prices are atrocious. How can a small entrepreneur afford something like a 16,000-square-foot sports playground? I think there is a lot more important basic things that we need to get on with rather than playing sports. They can always go home and do other things, but they need to learn the basic literacy first. I think what’s more important is: what goes on in a classroom; what happens with the instruction; what about the learning outcome? The regulations in India are much more onerous to private schools than they are in other parts of the world. This inhibits investment. This inhibits entrepreneurs creating opportunities. This inhibits the growth of the sector. One of the first entrepreneurs again, I spoke to here he said “Sometimes government is the obstacle of the people.” And I understood exactly what he meant when I saw the regulations that were impeding on the private schools here. But if regulation doesn’t explain the greater efficiency of low-cost private schools, what does? We’ve had some wonderful parent meetings in the schools here. These parents care about their schooling. They said, “Why are there only 10 computers?” “Why was their teacher absent last week?” “Why is the playground not finished?” They care. They are paying money. They feel its good money. It might seem very little to you and me; it’s good money to them. They want the best. And because they’re paying, they will keep the schools accountable. That’s a very important thing which you mess with at your peril. And I spoke to one father who had transferred his daughter from the private to public and now back to private. He told me “If you go to a market and are offered free fruit and veg, they’ll be rotten.” “If you want fresh fruit and veg, you have to pay for them.” I’ll never forget that. That was his experience of free public education. He thought paying was better. He thought the accountability kept the schools on their toes in a way that couldn’t possibly happen in the public schools. At fee-charging private schools, parents expect more because they’re paying more. So they hold school leaders accountable. And school leaders, in turn, hold their teachers accountable because they’ll go out of business if they don’t. By contrast, public schools here almost never fire teachers for poor performance or absenteeism. Enrollment in fee-charging private schools is growing at 10% a year. And if that continues, they’ll soon enroll the majority of students, nationwide. In cities like Hyderabad, they already do. It’s great that these schools perform better at a fraction of the per-pupil cost of state-funded schools. But there’s still a lot of room for improvement among them, and wide variations in quality from one to the next. So are the good ones scaling-up? Muhammad Anwar, he’s typical… he’s got a heart. He provides scholarships named after his father for a percentage of the children in his schools. There’s no reason why philanthropists, well-meaning people can’t do that sort of targeted assistance to help the poorest of the poor come to schools like this, and really help them get an education. In an effort to expand access to education among India’s poor and lower castes, the government passed the Right to Education Act, or R.T.E., in 2010. Under the new law the government requires private schools to reserve one-quarter of their places for disadvantaged students, and pays those students’ tuition. At the same time, the law demands all private schools meet extensive infrastructure and teacher certification requirements. But, as we’ve seen, low-cost private schools cannot afford to meet these requirements, which would force them to quadruple their tuition fees, according to one estimate. Since that would put them out of reach of the poor families they serve, it’s just not an option. The result? In many states, the government has begun to shut down thousands of low-cost private schools. But, quality control isn’t the only justification for regulating schools. Some people worry that if educators are free to teach whatever they want, and parents are free to choose among them, that it might Balkanize communities into warring factions. But, is that true? Does diversity have to mean discord? To find out, we need to head back to a town where cultures have been colliding for hundreds of years. When people think of New Orleans, they often think of Mardi Gras; a celebration inherited from the French, who ruled Louisiana during most of the 18th century. The French got the idea from Roman Catholics, who in turn, got it from Roman pagans. Among the most popular paraders are the Mardi Gras Indians, comprised of African-Americans who wear costumes inspired by Native Americans. Music, of course, is a big part of Mardi Gras, especially jazz, which was born in New Orleans from African roots, European instruments, and a dash of Spanish influence. You can still see some nice Spanish architectural touches in the city’s French Quarter. All of that to say: if you’re looking for a cultural melting pot, New Orleans is a pretty good place to be. Now let’s say you add to this melting pot a dollop of school choice; a program that lets families choose from among a host of public and private schools that teach different values and religions. Would all heck break loose? That question came up in 2002, when the U.S. Supreme Court was asked to decide the fate of just such a program in Ohio. Vouchers worth twenty-five hundred dollars were offered to low-income families who could redeem them at public and private schools… including religious ones. That freedom of choice gave pause to Justice Stephen Breyer, who feared that it would create conflict in a diverse society like ours and tear our nation apart. Two other justices shared Breyer’s reservations, but the majority decided to uphold the voucher program. It wasn’t that they necessarily disagreed with him; they just thought his concern had no bearing on the constitutionality of the program. So the question remains: were Breyer and the other dissenters right? Does giving families a wide range of educational choices cause conflict? New Orleans is a good place to answer that question, because a voucher program was introduced here in 2008 and expanded statewide four years later. As expected, most of the schools were religious. What wasn’t expected is that one of them… turned out to be Muslim. For some legislators, that was a deal-breaker. And they were pretty candid about it. One said that she liked the idea of providing parents with a choice between public schools and Christian schools, but that she did not support public funding for the teaching of Islam. Another said that he opposed any bill that would provide funding for Islamic teaching, saying “I won’t go home to my people and explain I voted for this.” Within a few days the objectors got their way. The school withdrew its application, not wanting to be the center of a heated debate. And its withdrawal caused the controversy to subside, at least temporarily. As a result, the statewide expansion of the voucher program was enacted. And, as it happens, the participation of non-Christian schools is not the only source of controversy under voucher programs. Another bone of contention is the teaching of science, especially biology. The dominant theory among biologists is that life on earth evolved through a process of genetic mutation, natural selection and random chance. And that theory itself has evolved over time as generations of scientists have updated Charles Darwin’s ideas, producing what is now known as the “modern evolutionary synthesis.” That’s how science works. Someone comes up with a theory that makes testable predictions. Others try to falsify it, either wholly, or in part. Theories that fall short are discarded or revised in order to better reflect reality. Science is a process for successively approximating the truth. Theories that survive gradually gain wide acceptance among experts, and the modern evolutionary synthesis is one of those survivors. But while science doesn’t promise absolute truth, religion often does. For instance, most evangelical Protestants see the Bible as literally true. This means that they believe humans and other animals did not evolve over millennia, but rather were divinely created in their present form. This creationist view is commonly taught in evangelical schools, and many of them participate in Louisiana’s voucher program. If you’re a parent looking for that sort of instruction, it’s a congenial arrangement. But not everyone is enthusiastic. I grew up in Louisiana, where we have a law called the Louisiana Science Education Act. This law allows the critiques of evolution to be taught with supplemental materials that have no oversight. And the purpose of this – I mean, let’s say this is to promote critical thinking -which sounds great- but the problem is they also say critical thinking is teaching creationism. I think everyone should have a good science education, but if you choose to send your kid to a private school without public funding, they can learn creation if you want, but anywhere where there’s public funding, we should teach reality. That is a common refrain among critics of creationist voucher schools, the public shouldn’t have to pay for that religious instruction. It’s hard not to admit that Justice Breyer was on to something. The participation of religious schools in voucher programs has led to tension and conflict. But what Breyer seems not to have recognized is that these very same battles have long been raging in our public schools. Some have only been minor skirmishes, but other cases have been, well…cases. One example is the Kitzmiller versus Dover trial of 2005. Parents in Dover, Pennsylvania, sued their public school district to stop it from teaching creationism in biology class. Those parents eventually won, but battles over public school biology instruction are still erupting around the country. Given how much we fight over our schools, with or without choice programs, it might seem as though there’s nothing we can do about it. And yet, diversity doesn’t always cause discord. There’s one field that’s been bringing together people of different races, cultures, and religions for generations; and producing harmony instead of acrimony. That field is music, and in particular, jazz. In the 1930s, it was illegal, in many states, for black and white musicians to share a stage. And segregation was the norm even where it wasn’t enforced by law. But, the musicians themselves ultimately overturned America’s artistic apartheid. A decade before Jackie Robinson broke the color barrier in professional sports, pianist Teddy Wilson and vibraphonist Lionel Hampton joined the Benny Goodman quartet, playing to packed houses around the country. Miles Davis later did the same thing by hiring the white pianist Bill Evans to join his famous sextet. Not to make a point, just because he liked the way Evans played. If music can create all those culture-bridging triumphs, why not schools? Could there be a way for us to promote parental choice and educational diversity without creating endless conflicts? To find out, it may help to go back in time to the place where those conflicts began. St. Augustine Church in Old Town, Philadelphia, it’s a beautiful building, but on a human scale, which is probably why it’s played host to everything from society weddings to feature films. But, the appearance of St. Augustine has changed quite a bit over time. A hundred and sixty-nine years ago, it looked like this. And a few months later…like this. The original St. Augustine’s Church was burned to the ground during the Philadelphia Bible Riots of 1844. By the time the smoke cleared, 25 people were dead and another 100 injured. If the idea of “Bible riots” sounds odd, the reason for them will sound even odder. Reading the Bible was mandatory in public schools, but each Christian sect had their own version of the Good Book. Protestants had the King James Version, which was required reading, but Catholics were only supposed to use their Douay Version, with its annotations and interpretations. Philadelphia’s Catholic bishop tried to defuse the situation by suggesting that either Catholics be exempt from the mandatory readings, or that they be allowed to use their own Douay Bible. And some Protestant ministers began suggesting that the bishop wanted to remove the Bible from public schools entirely. Unruly protests followed. Those protests became mobs and mobs became riots. It was America’s bloodiest conflagration over religion in public schools, but the same tensions could be found all across New England. In Maine, Bridget Donahoe was expelled from her public school for refusing to read from the King James Bible and her priest was stripped, tarred and feathered for putting such ideas in his parishioners’ heads. And, in Boston, an 11-year-old boy named Tom Wall was caned for a solid half-an-hour for refusing to read from it. Just as in Louisiana, publicly-funded religious schooling created social tension and conflict. But there is a difference. The U.S. Supreme Court upheld vouchers because they leave the choice between secular and religious schooling up to parents. But in 19th century Pennsylvania, and Maine, and Massachusetts, there was only one government school system, and it was Protestant. That sounds an awful lot like the sort of establishment of religion prohibited by the First Amendment to the U.S. Constitution. Why didn’t those Catholic families sue their school districts? Well they did, they just lost. Fortunately for us, Old Town Philadelphia is a good place to find out why. This is Carpenters’ Hall. It’s played a lot different roles over the years, from bank, to banquet hall. It was even the home to Benjamin Franklin’s Library Company. And in 1774, it was the site for the First Continental Congress. When the Second Continental Congress met two years later, they formally declared that Independence, and a dozen years after that, the Constitution of the United States was ratified. But though a majority of delegates supported the new Constitution, a third voted against it. One of the most common complaints was that it lacked explicit protections for individual rights. The critics got their way a few years later, however, when the first ten amendments, what we now know as the Bill of Rights, were adopted by the states. There are only three things that Thomas Jefferson wanted mentioned on his tombstone: That he founded the University of Virginia, and that he was the author of both the Declaration of Independence, and Virginia’s Statute for Religious Freedom. That Statute declared that no one could be “compelled to frequent or support any religious worship, place, or ministry whatsoever.” In the preamble to his Virginia Statute for Religious Freedom, Jefferson wrote that: “…to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical.” What if that is the underlying cause of America’s endless school wars: not the diversity of our ideas, but the compulsion to pay for those we disagree with? Yet that is precisely what’s been happening for the past 150 years. Everyone has been compelled to pay for a single, official system of education so naturally everyone has wanted it to reflect their own views and reject those they oppose. But in a society with so many contradictory views, that’s been impossible. The only way for one group to win has been for another to lose, hence our endless battles over what is taught in public schools. In the last years of the 18th century, Catholics in Philadelphia were still very poor. So when two Augustinian friars came to the city to build a church, they had to cast a wide net in order to raise the necessary funds. One of their main donors was the sitting President of the United States: George Washington, a Protestant. Washington’s gift caused no public outcry; in fact, St. Augustine’s returned Washington’s ecumenical favor when it became a hospital for stricken Protestants during the cholera epidemic of 1832. Wouldn’t it be great if we could harness that same spirit of philanthropy in education? One way to find out is to visit a place where it’s already happening… This is the Lehigh Gorge Scenic Railway, about an hour north of Philadelphia. Back in George Washington’s time it was just starting to be explored by coal miners, and a community was founded here in 1818 called Mauch Chunk, meaning: “Mountain Where the Bears Are.” Some things have changed over the years; the town is now known as Jim Thorpe; but for the most part, people here are happy to keep that 19th century flavor. Here in the woods of Central Pennsylvania, there is one 21st century innovation that has taken root which the locals seem to like. When it was brought to our attention that this tax credit was enacted I thought it was too good to be true, and most of the money is an expense we would incur anyway in the form of taxes. So, it’s always nice to be able to direct your dollars where you’d like to direct them. It’s called the Education Improvement Tax Credit. Businesses can donate money to any of a number of charitable scholarship organizations. Those organizations help low-income families pay tuition at schools the parents choose. Pennsylvania’s scholarship tax credit program operates in small towns all across the state, but most of the students it serves are found in big cities like Philadelphia. I take donors into schools a lot. And it’s very unlikely that you’ll leave any of these schools without saying “How can I help?” We have had a really high 90 percent retention rate with companies who have given to us. We obviously have school fairs to help them choose. But it’s – as long as the school is accredited by the state, then the families are empowered to choose what school works best for their kid and the scholarship follows them. If they don’t like the school, they can go to another school. The major limitation of the program is that the state has capped the total value of donations that are eligible for tax credits. With the current situation, even the school district is interested in partnering on the QT with us because they are closing failing schools. I always say we’ve no stake in this game as an organization. Our job is to just get scholarships, get them to kids who don’t have access to them. And so if they mechanically made it easier and they removed the cap, I think the programs would explode in size. I think you’d see three or four times the size. And what I think you’d see is the quality of education, even in some of the non-public schools, would even get better. It sounds as though the program would grow dramatically if the tax credit cap were raised or removed. In fact, we can already see that happening in the state of Florida. What’s different about Florida’s program is that its cap is automatically raised every year, so long as there are more families and more donors who want to participate. In just a few years, the program doubled in size to nearly 70,000 students. Subsidizing education through voluntary philanthropy seems to offer a lot of freedom to parents and donors, but what about teachers? And how could we even measure the difference? I don’t know about you, but I could use a beer. Maybe I should rephrase that. The beer itself is not going to help us answer this question, but a technique developed by a master brewer actually will. Enter William Sealy Gosset, a young chemist at the Guinness Brewery in Dublin, Ireland. Gosset’s job was to improve the beer without having to raise the price. That meant doing experiments to identify things like… the best ingredients. But those experiments took time and they cost money, so Gosset had to figure out ways of extracting useful conclusions from just a few small-scale studies. The company was so keen on his efforts that it gave him a year-long sabbatical to research statistics in London. Their decision paid off. Gosset developed a technique for drawing conclusions from very small studies; making statistics a useful and affordable way for Guinness to improve its products. For instance: presented with two shipments of hops, Gosset could tell if one was better than the other by testing just a few samples. And he knew how confident he could be in his results. The company was so impressed by Gosset’s breakthrough that they didn’t really want other breweries to learn about it. Nevertheless, they let him publish his work anonymously. Gosset chose the alias “Student.” So his technique became known as “Student’s t-test”. And it’s still used by scientists all over the world. In fact, that’s why we’re interested in Gosset. His test can help us answer our question about regulatory differences between vouchers and tax credits. As this chart illustrates, the difference is substantial. Joining a voucher program is expected to more than triple the amount of red tape educators have to contend with. That’s a much bigger burden than the one expected for participating in a tax credit program. One reason for the difference might be that tax credit programs like the one in Pennsylvania rely on voluntary private funding. No one is forced to donate to a scholarship granting organization, and anyone who does can pick the organization that receives their funds. It’s a system that is directly accountable to both donors and parents, so there’s little incentive for piling on regulation. Vouchers, on the other hand, are public dollars. All taxpayers have to pay for them, and yet, they have no direct say over how those dollars are spent. As a result, some legislators feel they must use regulations to control how vouchers are used. Unfortunately, as we saw in India, Chile, and Sweden, those regulations are not always helpful. In most countries, we not only make it cumbersome to operate an individual school, we make it hard for innovators to scale-up successful ones, much harder than it is to replicate excellence in other fields. That’s kind of a big deal. How big? And that’s why we’ve come here, to the outskirts of Manchester, England, because this is where the wave began, in the late 1700s. This was the birthplace of the Industrial Revolution. And it’s where the American Francis Cabot Lowell learned how to build a water-powered textile mill, from the people who first developed them. And yet, the most dramatic thing about the Industrial Revolution is not the machinery, but the transformation it caused in the standard of living. For the first 200,000 years of human history, and prehistory, the average person survived on three dollars a day, or less. In 1798, a Brit named Thomas Malthus famously described this problem, and claimed that the population would always rise faster than the supply of food and other resources, so the standard of living could never rise. Ironically, Malthus was absolutely right about the way the world worked – right up until his own generation. In the two centuries since, the world’s population skyrocketed. According to Malthus, that should have led to global starvation. Instead, the standard of living rose even faster than the population. In the countries that caught the wave early, average incomes shot upwards by a factor of more than 30, from three dollars a day, to one hundred. That is the real wave, a tide of innovation so colossal that it swept away the Malthusian population barrier. After 200 millennia of stagnation, sustained progress in human welfare finally became the norm. And it all began here, in the United Kingdom, in the mid-18th century. So what was Britain’s secret ingredient? There’s no shortage of theories: Was it a higher savings rate, international trade, exploited workers, colonialism, greed, modern science, the Protestant work ethic, railroads, canals? And on and on there have been dozens of possible explanations offered since people started to notice the wave. Until shortly before the Industrial Revolution, earning a living was scorned by the elites of every society on earth. If you worked with your hands, you were beneath the notice of dignified people. And if you ran a business, you were beneath their contempt. The widespread loathing of entrepreneurship has to have made opening a business less appealing. If all that hostility prevented the rise of the Great Wave, it’s terrible news for education. After all, running a business that earns money educating kids is still widely despised today. Consider the case of Reed Hastings, the founder and CEO of Netflix. After college, Hastings joined the Peace Corps and went to Swaziland to teach high school students. In the 1990s, while he was hatching the idea for Netflix, Hastings also took graduate courses in education, because he wanted to understand why schools were lagging while other fields were leaping ahead, sound familiar? Since then, Hastings has given millions to educational charities, but has decided not to start an education business. He told a reporter he didn’t want people to think he was doing it for the money. So, education can have some of Hastings’ charity, but it can’t have his entrepreneurial leadership. But, outside of education, that attitude started to change around the year 1600. A new way of talking about commerce appeared alongside the old one. Shakespeare himself was a transitional figure. In addition to casting characters who fit the old negative mold, he introduced a few who shattered it. His Comedy of Errors, for instance, is full of businesspeople who are basically…nice. They’re polite, they honor their contracts, and they don’t try to cut chunks out of each other. In the years that followed, favorable references to commerce appeared in English plays, essays and novels. Many of them are now forgotten, but others, not so much. If this little bungalow looks familiar, it might be because it was featured in the television adaptation of Jane Austen’s Pride and Prejudice. As with most of Jane Austen’s books, it is filled with pompous gentry, who sneer at anyone who works for living. But in Austen those are bad guys. For instance, the conniving Bingley sisters mock our heroine, Lizzy Bennet, for having an uncle who’s a merchant. But though he works in Cheapside, they’re not criticizing him for being poor. Cheapside is an actual street in London, and in Austen’s day, it was an upscale shopping district. The Bingley sisters mock Lizzy’s uncle because he earned his money in trade instead of getting it the right way, from a dead relative. That opportunity for entrepreneurs to earn people’s respect, says economist Deirdre McCloskey, is what caused the Great Wave of Innovation that raised the standard of living worldwide by a factor of 10, a factor of 30 in the nations that adopted it early. She doesn’t argue that mundane economic factors like financial incentives, competition, and consumer choice were unimportant. Just that they were insufficient. But is she right? It’s too soon to say with confidence, but one thing we can say is that her theory meshes well with the story of education. Then as now, education was perhaps the only field in which successful entrepreneurship was not celebrated, and so did not flourish. Where it has begun to thrive in modern times, it is only in exceptional places where resistance to education as a business has lessened. But even if McCloskey does turn out to be wrong, we’re still left with a choice in how we think about people who work for a living, whether it’s digging ditches, running a shop, or building a school network, a choice between say, Jane Austen’s snobbish Bingley sisters, or her open-minded Lizzy Bennet? Who do we want to be? What if we allowed all education entrepreneurs to put their own money on the line in an effort to better serve us? Gaining or losing- based on their successes and failures- just as entrepreneurs do in other fields. And what if we made sure that everyone had access to that wide-open marketplace? Would we then see excellence scale-up in education? Andrew Coulson’s exploration began in a one room schoolhouse in 18th century New England and has taken us on a journey across the globe, seeking answers to the question: Why can’t education use innovation to grow like a successful business? We have met inspirational teachers in unlikely places, and have seen a unique approach to learning in South Korea where students put a personal premium on competition. And we’ve seen how new educational ideas have lit the flame of learning in places like Chile, Sweden and India. But the question remains: what will it take for educational excellence to ride the wave of innovation that improves the outcome for everyone?

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12 Responses

  1. rafael17264 says:

    there are a lot of ways on which this ideas about freedom and capitalism can be presented,like through short videos,interviews,speeches,books,maybe some protests or taking some actions,but i think there is definitely no better way than through documentaries like this 3,or the ones on johan norberg and hernando de soto on this channel.and also through movies like the 3 parts atlas shrugged.unfortunately,this channel is not very popular,although it deserves millions of views

  2. Startuper belge says:

    this should have millions of vues

  3. Stefan Alexander says:

    Makes me wanna cry because bureaucrats dont care. That's understandable but what's ironic is that they always blame entrepreneurs for being greedy and ripping people off when they're the ones that do it.

  4. S B says:

    The best quoute" If you go to the market and want free fruit, it's rotten, if you want fresh you have to pay for it"

  5. SolarisLunaran says:

    While I am watching this video it has been published for 51 days and only has been viewed 1562 times. That is frustrating given how wonderful this series is.

  6. cosmicallyderived says:

    Interesting to be so caught off guard a bit by the role religion plays in this third episode. It then becomes pretty clear that weight would be carried by this population on this topic because they are the folks that predominantly have children and are philogenerative. It's funny how everyone instinctually wants to teach and raise and shape children because they are obviously the ones to carry the future. Parents are the first teachers and when you get a conflict between parents and teachers regarding world view the philogenerative group will simply out number the barren one and inherit the earth by default. Barren groups must make converts to make up for the lack of fresh numbers. Interesting dynamics for this open society.

  7. Eytan Kollin says:

    Thank you Mr. Coulson. I regret your passing as you had an innovative and focused mind. You did well with your life, for what my opinion is worth. If there is an afterlife I would hope to see you in it. In the unlikely event I become wealthy I would like to endow a scholarship or get a school named after you. Hopefully I'll meet you someday. Hopefully not too soon.

  8. Simsheng Vue says:

    Is it that hard to just say capitalism?

  9. Ashley Penn says:

    "We should be teaching reality"

    But creationism IS reality. I became a Christian in part because of the overwhelming evidence for it. If I didn't believe in science and reason, I would never have come to the conclusions I did that creationism, or at the very least, monotheism, was responsible for the origin of life, the universe, and everything. (Yes, even Christians read Hitchhiker's Guide.) I've been studying this topic for too long to just discard it out of hand. The supporting evidence is undeniable (no matter how many people try to deny it).

  10. Glenn says:

    Nice video. So, why are many afraid of an education market place based on profit/loss for a large part??

  11. J. Fernandes says:

    Amazing series!

  12. Infographic Instant with Bryane Michael says:

    Why do we assume that “traditional” work-for-the-man teachers are not entrepreneurs? We spend a fortune developing our knowledge and techniques to sell to the highest bidder (often funder or grant agency). Dont focus on the employing institutions’ private or public statis. Look at the labour — who is free market and the upper and lower ends of the labour market. Thanks for a thought-provoking and brilliantly executed video!

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