Concerned Citizen Kane: Murdoch Delves Into For-Profit Education


Last week, nearly one thousand representatives from business groups, education departments, state legislatures, and free-market think tanks descended on San Francisco's Palace Hotel to strategize a revolution in American education. Focused on state-level politics and driven by marketing buzzwords like "blended learning" and "customized online instruction," it was not the kind of policy powwow that typically draws national media attention.

But education reform is a hot topic these days, and interest in the two-day "Excellence in Action" summit was further heightened by the controversial presence of the summit's keynote speaker: News Corp. chairman Rupert Murdoch, whose recent foray into for-profit education has focused a spotlight on an increasingly confident and ambitious movement to privatize and digitize American K-through-12.

The debate over the reforms endorsed at "Excellence in Action" has been steadily intensifying. Reform boosters -- a mix of (mostly) Republican state lawmakers, for-profit education companies and their lobbyists, and libertarian ideologues -- maintain that creating a competitive hi-tech education marketplace will make U.S. students more competitive internationally and close the much-lamented achievement gap. Critics suspect an agenda that has more to do with smashing teachers unions and turning tax dollars into profits. Since entering the education reform fray, Murdoch has become a vocal reform booster and unlikely spokesperson for "our children." As he has several times before, he used his time in San Francisco to argue forcefully that what public education needs is a good dose of free-market innovation. "Put simply we must approach education the way Steve Jobs approached every industry he touched. To be willing to blow up what doesn't work or gets in the way."

Among those Murdoch and his fellow reformers seem to view as "getting in the way" are the majority of associations comprised of actual educators. More than one hundred of these teachers and their allies protested Murdoch's presence with placards declaring, "Our Schools Are Not for Profit." Among the marchers was Matthew Hardy of the United Educators of San Francisco. "I think we should be very concerned that the folks inside this hotel are looking at our schools as untapped profit centers," he said. "Schools are there to educate kids, not make money for corporations. Murdoch and the rest of them aren't just going after teachers unions, but the idea of public schools in general."

Inside the conference hall, hecklers interrupted Murdoch's address as he took the podium. "Equality in education, not privatization!" one yelled. "Corporations own the media, why not education?" asked another before security escorted him out.

This question -- "Why not education?" -- is one Murdoch takes seriously. His answer, it seems: Why not indeed? The mogul bluntly explained his late interest in education while announcing News Corp.'s acquisition of the Brooklyn-based school-performance tracking firm Wireless Generation in November of 2010. "When it comes to K-through-12 education, we see a $500 billion sector in the U.S. alone that is waiting desperately to be transformed." Murdoch was only slightly more discreet the previous month during a speech in Washington D.C., when he couched his concern for Why Johnny Can't Read by waxing nostalgic about the American Dream as understood by the non-rich -- those Americans, including those protesting outside the Palace Hotel, who have begun to refer to themselves the "99 percent."

"Upward mobility in America is in jeopardy unless we fix our public schools," the billionaire told the Washington D.C. audience shortly before the launch of News Corp.'s Education Division. The situation was so critical, Murdoch warned, "Our middle-class way of life may disappear."

Murdoch crafted his keynote message last week in similar terms of supremely enlightened self-interest, as if a spike in his own bottom line was just a happy byproduct of his crusade to save the middle-class. Even in his new incarnation as Concerned Citizen Kane, Murdoch had precious little use for sentimentality in San Francisco, and held no fear of sounding overly brash in discussing a field he knows almost nothing about.

"I'm speaking today as a businessman. So let me come right to the point," Murdoch said after the hecklers had been removed. "We need to tear down an education system designed for the 19th century -- and replace it with one suited for the 21st."

Murdoch argued that digitizing America's classrooms and viewing K-through-12 as a business marketplace will better serve underperforming students -- "the human toll of our complacency." It was left to others to spell out the other potential beneficiaries. According to summit participant and ex-D.C. mayor Adrian Fenty, a Democrat, following the "Roadmap for Reform" unveiled in San Francisco would result in "a huge flow of business to the private sector." But getting there, Fenty stressed, was a bipartisan effort, requiring Democrats to "get past the teachers unions."

For Murdoch, the prize sitting beyond the teachers unions resembles a glowing Apple display window more than a brick and mortar public school. In one of several references to Apple Inc. products in his keynote, Murdoch imagined American schools one day resembling Apple stores (which are publically traded and non-unionized) and compared contemporary public education to the Big Brother of George Orwell's 1984, as represented in Apple's iconic commercial that ran during the 1984 Superbowl.

"Let's be clear: Technology is never going to replace teachers," Murdoch stated in response to a recent New York Times article that threw some cold water on the promises of digital education. But Murdoch's reassurance didn't jibe with the views of other influential speakers at the conference. "We're too labor intensive, we have more teachers than agriculture workers," huffed James Guthrie of the George W. Bush Institute. Guthrie argued that sweeping education reform would add "trillions to the economy" and future federal budgets, which would ultimately translate into money for "the people." But a return to fiscal health won't mean hiring more teachers. "We need to inject technology forcefully into the equation," he stressed.

It is revealing that the financial crisis that has hit the middle class so hard was heartily welcomed in San Francisco, Murdoch's newfound concern for the institutions of middle-class upward mobility notwithstanding. A major theme of the conference was summed up in a strategy session entitled "Don't Let a Financial Crisis Go To Waste." Speakers urged lawmakers to seize the moment to push through reforms and defenestrate their best-organized critics -- the teachers unions. "The budget cuts are the best thing that ever happened to us and are [allowing us to] structurally change public education," said a Republican policymaker from Indiana. "We've limited collective bargaining rights of teachers to wages and cut out the garbage."

Hanna Skandera, New Mexico Secretary-Designate for Public Education and former CEO of Laying the Foundation, said that a 25 percent cut to education budgets was an opportunity to for districts to get a better "return on investment" with their education dollars. Florida State Senator Don Gaetz argued that by turning "schools into businesses" and augmenting personal instruction with digital programs, districts could save as much as $2,000 per student while improving "outcomes." (Stephanie Mencimer of Mother Jones recently examined these outcomes and found the early results inconsistent with the reform hype.)

In line with the anti-union animus of Murdoch's media outlets, organized labor was the villain at the summit he headlined. By the last panel on the schedule, Democratic Los Angeles Mayor Antonio R. Villaraigosa felt the need to sheepishly preface a comment by saying, "I'm going to be controversial, but I'm pro-union." Chris Cerf, the New Jersey Commissioner of Education and former CEO of Sangari Global Education, expressed the more common view that political combat with unions was a blood sport vital to the success of the movement. "I'm so glad to be talking to legislators," he said. "This is 100 percent about political courage -- a knife fight in a dark room."

If they win their knife fight, the model Murdoch and his education reform allies have in mind is not the best of the state university systems of the past -- affordable, well funded, a symbol of the great middle-class expansion of the twentieth-century -- but rather the scandal-plagued for-profit online education industry of the twenty-first. Not the University of California at Berkeley, but the University of Phoenix. The "Roadmap to Reform" unveiled by summit chair Jeb Bush offered state lawmakers a blueprint for enlarging the space for remote education and expanding charter schools. Like the model bills provided by the business-funded American Legislative Exchange Council, Bush's "Roadmap" encourages lawmakers "to adopt a sense of urgency" in opening up the public coffers to for-profit education, as well as forcing public schools to invest heavily in possibly labor-replacing technologies. Knowing not all reforms will succeed at once, Bush's foundation offers "policy combo-packs" to get the ball rolling on multiple fronts in newly squeezed state legislatures. As an organizer declared at the start of the conference, "The goal is to learn about education reform, then go back and file legislation."

* * *

Murdoch has in the last year pitched the News Corp. flag in the education reform movement. To run the News Corp. Education Division, he hired former chancellor of NYC schools Joel Klein for a reported $4.5 million. Murdoch and Klein had come to know each other through Murdoch's support for Education Reform Now (ERN), an industry-funded group that sided with Klein in a debate over teacher layoffs in New York City. Shortly after Klein joined News Corp., he was named chair of ERN, the growing activities and empowered tone of which testify to an education privatization movement on the march.

News Corp.'s Education Division won a major contract last year when Wireless Generation landed a no-bid $27 million deal to track student performance throughout New York state. But the contract was annulled in the aftermath of the News International phone hacking scandal. (It may or may not have helped matters that Klein, News Corp.'s education guru, played such a high-profile role during the height of the scandal; he was tasked with leading an internal inquiry into the hacking, and sat prominently behind Murdoch during his internationally televised inquisition by members of British Parliament.) From News Corp.'s perspective, the New York State Comptroller decision was a deeply troubling precedent and a lesson that schools are not tabloids: when it comes to people's kids, business ethics and reputation matter very much.

This fact may have had something to do with why Joel Klein pointedly refused to answer a Think Progress reporter's question about whether a firewall exists between News Corp.'s education business and its media operations, specifically its profit leader, the propaganda network known as Fox News.

This question is significant because News Corp. is uniquely situated to take advantage of synergy between the production of education content and distribution. It is easy to imagine News Corp.'s news and entertainment divisions one day producing branded, packaged news for use in schools. Among the earliest successful models of for-profit education products in public schools is Channel One, which offers pre-packaged news shows to schools free of charge in exchange for exposing students -- "captured audiences" -- to the advertisements that accompany the programming.

Some of the education reform entrepreneurs in San Francisco are already thinking along similar lines. Among the vendors at "Excellence in Action" was a firm called Elixer XES 3-D that specializes in glassless 3-D video monitors. The firm's spokesman worked the room with a paper titled, "3-D: The Technology Brought a Pot of Gold to the Motion Picture Box Office. It Has the Potential to Bring 'Golden' Learning Back to Our Schools, at Warp Speed." The company, which is working with 10 school districts and counting, is developing educational videos on the Channel One model. Its promotional materials include several pages devoted to the benefits of advertising to students in 3-D. "An intrinsic property of 3-D advertising is media richness," it states. "Consumers interacting with products in 3-D advertising ... results in a positive consumer response as measured by increases in product knowledge, brand attitude, and purchase intention."

Firms like Elixir 3-D are correct to be excited by an obvious quickening in the education reform movement. Last year's documentary Waiting for Superman disseminated its ideas to a wide audience. Slick new astro-turfy websites -- including ERN's and -- are popping up with hefty funding behind them. February 1, 2012, has been dubbed national "Digital Learning Day," and next year's "Excellence in Action" summit will take place in Washington, D.C. Across the country, state legislators are filing bills and reading from the scripts handed out at events like "Excellence in Action."

This is the result of years of groundwork by conservative groups such as The Heritage Foundation, the Jaquelin Hume Foundation, and the Friedman Foundation for Educational Choice. The latter group, which will celebrate Milton Friedman's centennial next year, feels the movement that Friedman launched with an article in 1955 is finally breaking through. "There is a lot of action," said Leslie Heiner, who directs the Foundation's educational programs. "There's an enthusiasm that's percolating all over the place. It's a very exciting time for school choice right now."

Booster claims aside, it is not a very bipartisan excitement. The heavy presence of Republican legislators and libertarian think tanks belied the claim, made by Jeb Bush at the close of the conference, that the issue unites left and right. Indeed, moderator Michele Bernard concluded the conference by asking Adrian Fenty, "How can we get more Democrats involved?"

One way is to pay them $4.5 million and stock, Joel Klein's reported package at News Corp. It might also help to tone down the Religious Right flavor of education reform events. Despite the protestations of organizers that theirs is an ultra-modern, bipartisan affair, the proceedings in San Francisco ended with a prayer that laid claim not just to the Constitution's blessing, but also that of a Supernatural Being or two.

"We pray," intoned the event's in-house clergyman, "for the courage to take what we've learned here and apply it in our states for the betterment of our children, in the name of Jesus Christ, son of the Lord our God."

Posted In
Fox News Channel, News Corp.
Rupert Murdoch, Joel Klein
Investigations, Wireless Generation
NewsCorp News, NewsCorp Watch
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