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This fall, New Orleans’s Recovery School District became the country’s first all-charter district, completing a process begun following Hurricane Katrina, when the Bush administration refused to pay for reopening public schools, instead providing $45 million for charter schools to take their place. While these schools are publicly funded, the local community has no control over their curriculum or quality because they are not overseen by any democratically elected school board. Ad Policy

If corporate lobbyists have their way, the New Orleans model will be replicated across the country, with Netflix CEO and charter booster Reed Hastings leading the call to “get rid of school boards.”

Sixty years after Brown v. Board of Education, a new type of segregation is spreading across the urban landscape. The US Chamber of Commerce, the American Legislative Exchange Council (ALEC), Americans for Prosperity and their legislative allies are promoting an ambitious, two-pronged agenda for poor cities: replace public schools with privately run charter schools, and replace teachers with technology.

What was accomplished by a hurricane in New Orleans is being pursued elsewhere by legislation. The formula is simple: use standardized tests to declare dozens of poor schools “persistently failing”; put these under the control of a special unelected authority; and then have that authority replace the public schools with charters. In 2011, Tennessee and Michigan created special districts to take over low-scoring schools; in both cases, the superintendent was specifically authorized to replace public schools with charters. This year, Wisconsin legislators considered a bill that bypassed the middle step and simply required that low-performing public schools be replaced with privately run charters. Since test scores are primarily a function of poverty, it’s no surprise that 80 percent of the Tennessee schools targeted for privatization are in Memphis, or that the Michigan and Wisconsin bills focus, respectively, on Detroit and Milwaukee.

Recently, corporate-backed reform advocates have begun insisting that no public authority whatsoever be responsible for running schools. Neerav Kingsland, the former CEO of New Schools for New Orleans, warns that superintendents “must not succumb to the temptation to improve schools through better direct operation. Rather, [they] must humbly acknowledge that a marketplace of school operators will…out-perform even the best direct-run system.” Hastings similarly suggests that the role of elected school boards be limited to “bringing to town more and more charter-school networks. Sort of like a Chamber of Commerce would to develop business.”

Thus, what “slum clearance” did for the real-estate industry in the 1960s and ’70s, high-stakes testing will do for the charter industry: wipe away large swaths of public schools, enabling private operators to grow not school by school, but twenty or thirty schools at a time.

This is not an evidence-based policy; research shows that replacing public schools with privately run charters will, in itself, do nothing to improve education. But this hasn’t dampened the vigor of charter-school boosters.

* * *

Corporate lobbyists are increasingly promoting a type of charter school that places an emphasis on technology instead of human teachers. One of the exemplars of this model is Rocketship Education, based in Silicon Valley but with contracts to open schools in Milwaukee, Memphis, Nashville and Washington, DC. Rocketship’s model is based on four principles. First, the company cuts costs by eliminating teachers. Starting in kindergarten, students spend about one-quarter of their class time in teacherless computer labs, using video-game-based math and reading applications. The company has voiced hopes of increasing digital instruction to as much as 50 percent of student learning time.

Second, Rocketship relies on a corps of young, inexperienced, low-cost teachers. The turnover rate is dramatic—nearly 30 percent last year—but the company pays Teach for America to supply a steady stream of replacements.

Third, the school has narrowed its curriculum to a near-exclusive focus on math and reading. Since both Rocketship’s marketing strategy and teachers’ salaries are based on reading and math scores, other subjects are treated as inessential. There are no dedicated social studies or science classes, no music or foreign-language instruction, no guidance counselors and no libraries.

Finally, Rocketship maintains a relentless focus on teaching to the test. Students take math exams every eight weeks; following each, the staff revises lesson plans with an eye to improving scores. Rocketship boasts of its “backwards-mapping” pedagogy—starting with the test standards and then developing lesson plans to meet them. Rocketship is, as near as possible, all test-prep all the time.

Research suggests that any number of school models are more beneficial than online instruction. So why is this model being promoted by the country’s most powerful lobbies? Because, in Willie Sutton’s (apocryphal) words, “that’s where the money is.” As Hastings explains, the great financial advantage of digital education is that “you can produce once and consume many times.” Schools like Rocketship receive exactly the same funding for their teacherless applications as traditional schools do for credentialed teachers. Indeed, ALEC’s model legislation—adopted in five states—requires that even entirely virtual schools be paid the same dollars per student as traditional ones. As a result, the profit margins for digital products are enormous. It’s no wonder that investment banks, hedge funds and venture capitalists have flocked to this market. Rupert Murdoch pronounced US education “a $500 billion sector…waiting desperately to be transformed.”

Wall Street looks at education the same way it regards Social Security—as a huge flow of publicly guaranteed funding that is waiting to be privatized. The 2010 elections marked a major success for this effort, with twelve new states coming under Republican control. Within months, Florida’s new governor signed a bill requiring that high school students take at least one online course as a condition of graduation. At a meeting of investors in New York in 2012, one adviser gushed that “you start to see entire ecosystems of investment opportunity lining up” in K–12 education. Indeed, from 2005 to 2011, venture-capital investments in education grew almost thirtyfold, from $13 million to $389 million.

At the heart of these opportunities, Princeton Review founder John Katzman explains, is the question, “How do we use technology so that we require fewer highly qualified teachers?” This is the essential goal of the financial sector: to replace costly and idiosyncratic (though highly qualified) human teachers with mass-produced and highly profitable digital products—and to eliminate the legal and political conditions that inhibit a free flow of taxpayer dollars to the creators of these private products.

* * *

The fastest-growing sector of the for-profit charter industry is online education, despite the fact that most studies show that these schools have also produced the worst educational outcomes. However, the market for virtual schools is limited—particularly in poor cities where fewer parents can serve as stay-at-home tutors to supplement online modules. Investors thus face a contradiction: the greatest opportunity for charter-school growth is in poor cities, but these are also the places where wholly online schools are least likely to flourish.

The solution has appeared in the emergence of “blended” schools like Rocketship’s, where students attend actual classes but spend a portion of their day online. Rocketship is a not-for-profit organization, but its operation blurs the line between profit and nonprofit. For instance, it has enjoyed generous funding by Reed Hastings and a fund headed by venture capitalist John Doerr. In turn, Hastings and Doerr are among the primary investors in DreamBox Learning—a for-profit math application that Rocketship uses in its computer labs. The Department of Education reviewed DreamBox in December 2013 and concluded that it has “no discernible effects” on mathematics achievement. After Rocketship-commissioned consultants offered further data, the DOE upgraded its assessment to “potentially positive,” based on “small” evidence.

Normally, if a school superintendent was presented with a curriculum rated somewhere between “no discernible effect” and “potentially positive” based on “small” evidence, he or she might choose to look elsewhere. But if Rocketship rejects DreamBox, it may endanger funding critical to its corporate growth. Thus, pedagogical choices are made not on the basis of what’s best for students, but at least partly on the interests of private investors.

The DreamBox story points to a second source of corporate animosity toward elected school boards. With charter schools, tech companies can cut a deal with a single executive covering hundreds of schools, and the product choice may reflect financial rather than pedagogical criteria. By contrast, public-school curricula are set by officials who are accountable to a locally elected board prohibited from any financial relationship with vendors. As Hastings explains, “school districts [are hard] to sell to because [they] are really reacting to voter forces more than to market forces.” Indeed, venture capitalists at one recent conference suggested that they might refuse to fund start-ups that focus on selling to public-school districts.

The most extreme school-makeover plan comes from Michigan, where a secret clique of gubernatorial aides and technology-industry representatives cooked up a proposal to issue Michigan students “EduCards”—resembling food-stamp debit cards—to be loaded with each student’s education funding for public or privately provided courses. The Detroit News explained that they “could use leftover money on the ‘EduCard’ for…Advanced Placement courses, music lessons, sport team fees [or] remedial education.” When the Michigan plan was leaked, a public outcry shut it down. But its outlines offer a vision of where the industry is headed.

After decades of research, we know a lot about what makes for good schools. But there is also a handy shortcut for figuring this out: look where rich people send their kids. These schools invariably boast a broad curriculum taught by experienced teachers in small classes. Wisconsin’s top ten elementary schools, for instance, look nothing like Rocketship’s: they have twice as many licensed teachers per student; offer music, art, libraries, foreign languages and guidance counselors; and provide classes that are taught in person by experienced educators.

Rocketship’s most important backer in Wisconsin is the Metropolitan Milwaukee Association of Commerce. In 2013, the MMAC supported a bill that would make it easier for companies like Rocketship to expand, dubbing such schools “the best of the best.” Yet the suburban schools of the MMAC’s president and chairperson look very different. Both have approximately fifteen students for every licensed teacher, or half the Rocketship ratio. Both provide music, art and libraries complete with professional librarians. And both boast veteran teaching staffs, with 90 percent of the teachers at one school holding graduate degrees. It appears, then, that what is deemed the “best of the best” for poor kids in Milwaukee is unacceptably substandard for more privileged students.

Thus, the charter industry seeks to build a new system of segregated education—one divided by class and geography rather than explicitly by race. Segregation may ease the politics of the industry’s expansion, allowing privileged families to see the Rocketship model as something that’s happening only to poor people, as something inconceivable in their own neighborhoods.

But such parents are mistaken. Investors are operating on a market logic, not a racial one. The destruction of public schooling starts in poor cities because this is where parents are politically powerless to resist a degraded education model. But after the industry has taken over city school systems, it will move into the suburbs. Profitable charter ventures will look to grow indefinitely, until there are no more public schools to conquer. As Rocketship co-founder John Danner explains, critics shouldn’t worry about charter schools skimming the best students, because eventually “we’re going to educate all of the students, so there’s nothing left to skim.”

Read more from our special education issue

The Editors: “Our Public Education System Needs Transformation, Not ‘Reform’”

Kenzo Shibata: “5 Books to Build a Movement for Education Justice”

Dana Goldstein: “The Tough Lessons of the 1968 Teacher Strikes”

Michelle Fine and Michael Fabricant: “What It Takes to Unite Teachers Unions and Communities of Color”

Daniel Denvir: “How to Destroy a Public School System”

Pedro Noguera: “Why Don’t We Have Real Data on Charter Schools?”

Diane Ravitch: “The Secret to Eva Moskowitz’s ‘Success’”

Lee Fang: “Venture Capitalists Are Poised to ‘Disrupt’ Everything About the Education Market” (web-only)