Advocacy philanthropy and the leveraged buy-out of public schools — Part 2

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by Danny Weil

[Note: This piece concludes the two-part essay. For Part 1, please see: Link]

Ted Forstmann and private advocacy philanthropy as a social movement

When there is an obvious financial pay-off for those promoting public policy changes through ‘advocacy philanthropy’, it behooves citizens to critically examine those advocates, their agendas and the implications of their claims. Sadly, this is not the case in America today nor was it at the time the leverage buy-out of public schools was being driven by those who posed as charitable individuals but whose real agenda was and is the incessant accumulation of profits.  However, in the spirit of critical examination, let us begin with entrepreneur, Ted Forstmann.

Forstmann was not an unfamiliar face at the time he was first advocating for the privatization of education.  Besides being a multimillionaire venture capitalist, Forstmann considered himself, “a pioneer of the leveraged buy-out” [1]. This is not surprising. He served on the boards of, or was a spokesperson for, many conservative organizations. His interest in school privatization and educational commercialization was born long before he founded the Children’s Scholarship Fund.

According to Forstmann, his educational pursuit was governed by what he had supposedly learned about schools. For example, he suggested that before the American Revolution and for one hundred years of our country’s history, education was widely available and diverse. He went so far as to argue that competition kept the quality of educational experiences high and education was then a voluntary act. Further, he claimed that during this period literacy was high – in fact, he stated it was higher than in some states today.

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Many other right-wing market fundamentalists echo the same rhythmic mantra. According to Andrew Coulson, a darling of reactionary neo-liberals early colonial America was arguably the freest civil society that has ever existed.  This freedom extended to education, which meant that parents were responsible for, and had complete control of, their children’s schooling. There were no accrediting agencies, no regulatory boards, and no teacher certification requirements. Parents could choose whatever kind of school or education they wanted for their children, and no one was forced to pay for education they did not use or approve of.

Prior to the Revolutionary War, the majority of American schools were organized and operated on a laissez-faire basis. There were common schools (often partially financed by local taxpayers, but primarily funded through private means) and specialized private schools of every sort (church schools, academies that prepared students for college, seminaries, dame schools for primary education, charity schools for the poor, and private tutors). Free schools were established by philanthropists and religious societies throughout the country to meet the educational needs of the very poor [2].

Of course, what Coulson, Forstmann and other market fundamentalists refused to acknowledge is the fact that in colonial America only the Anglo population was considered in literacy estimates.  Native Americans, African Americans, slaves and indentured servants were excluded from any statistical rendering. In Virginia alone, an entire 40% of the population who were slaves was simply disregarded in literacy estimates. Slaves were largely illiterate and prohibited from learning to read as a means of racism and social control [3].

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Never mind the facts, for Forstmann and his ilk, a combination of competition, charity, and private and semi-public institutions “worked” in the past and thus the conclusion is that they will work now. The problem, Forstmann has argued, is that starting in the 1850’s with the state of Massachusetts, America began a dramatic shift from free-market and charitable education to “government-run schools” [4]. And even though America today cannot be compared to the America of the pre-Civil War era, Forstmann’s position remained clear during his life – America needed to replace public schools with charitable choice and privatization.

If all this sounds familiar, it should, for Forstmann’s position is little more than an echo of conservative economist Milton Friedman’s position and the ideological echo chamber he was part of has managed to collar many erstwhile advocates with their views dominating the corporate media. Nobel Prize winning economist Milton Friedman argued for the modern concept of vouchers in the 1950s, stating that competition would improve schools and cost efficiency. The view further garnered popularity with the 1980 TV broadcast of Friedman’s series Free to Choose for which volume 6 was devoted entirely to the promotion of “educational freedom” through programs like school vouchers.

There is little doubt that comparable to Milton Friedman, Forstmann’s ideological educational vision was heartfelt and deep pocketed. However, there is no escaping the fact that Ted Forstmann was an entrepreneurial venture capitalist with a market driven agenda for education that seems more commercial and self-interested than altruistic.  For Forstmann, like all capitalists, profits come before people and if this means circling the ideological wagons around this grim reality then so be it.  Forstmann himself, claimed at the time of his launching of Children Scholarship Fund (CSF), that his interest in privatizing education through the use of philanthropic private school scholarships was driven by beneficence, not profit.  As late as 1998 he commented in a speech to the Washington Press Club: “This is a real moral issue. I hate talking about the economics of it” [5].

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This is the triumphant voice of the ‘advocacy philanthropist’ and can be heard in the garbled sophistry of the likes of Bill Gates who favors couching his advocacy philanthropic, privatization schemes in moral terms. But is it really a moral value system that anchors and fuels the advocacy philanthropist?  The answer is — yes, but it is a morality aligned with capitalism and self-interests.

During his tenure as the originator of the CSF, Forstmann was a senior partner in Forstmann, Little and Company, a private investment firm – hardly an educational venture based on caring, human moral principles. Pioneering the leveraged buy-out, Forstmann, Little and Company compiled an unprecedented record of performance over twenty years, investing $15 billion in 23 acquisitions including Gulfstream, a jet manufacturer; Community Health Systems; Ziff-Davis Publishing; Dr. Pepper; and Yankee Candle. The firm also attempted to acquire major investments in Whittle Communications, a company at the time that was already beginning to profit from public school financing and once the home of the insidious Channel One television programming pumped into thousands of public schools.

At the time of the attempted Forstmann deal, Chris Whittle (CEO of Channel One) was in the research and development stage of what he then called the Edison Project – the development of a national retail chain of private schools financed by public funds. Suffice it to say, Forstmann, like many other prescient neo-liberal entrepreneurs, saw a tremendous investment opportunity in private schooling subsidized by public funds and in the private management of public schools all paid for with taxpayer monies.  After all, Forstmann was the king of the leveraged buy-out.

During this time, Forstmann not only served with John Walton on the board of the Children’s Scholarship Fund, but he also assisted as an honorary chairman of the Washington Scholarship Fund that attempted to voucherize all education in D.C. He was described by the New Republic Magazine at the time as “one of the Republican Party’s leading moneymen.” When Newt Gingrich was forced to resign his post as the House Speaker in 1998, Forstmann was adroit enough to persuade the former politician to join him as one of the directors of his new buy-out firm [6]. For Forstmann and those of his breed, the ethics of subsidizing private profits with public funds is unquestionably moral.

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Apparently the ambition of Forstmann and Walton was to realize the construction of private educational enterprises subsidized by public funds and controlled by a few large, multinational corporations – much like the Health Maintenance Organization (HMO) structure for health care we see today.  That their efforts were and have been extraordinarily successful is unquestionable.  However, Ted Forstmann’s efforts to dismantle public schools and reconstruct them as private enterprises, goes way beyond mere advocacy speeches and exhortations.

For example, after a Florida judge rejected the nation’s first statewide, private school choice program in a decision rendered in 2000, Forstmann immediately jumped in to the forefront and offered his ‘advocacy philanthropic’ largess to fund private tuition scholarships for fifty-three children in Pensacola, Florida, whom he felt would be adversely affected by the court’s decision.

Under the Florida Supreme Court ruling at the time, children who were currently receiving what were then known as “Opportunity Scholarships” to attend private schools would be allowed to finish the school year, but the state would no longer pay their tuition beginning in the fall of 2000 in accordance with the Florida’s Supreme Court ruling.

Forstmann did everything he could to run around the Supreme Court’s decision in Florida.  Using advocacy philanthropy, a trick Forstmann knew well, he pledged philanthropic private school scholarships to ‘help’ low-income families cover tuition costs at private schools of their choice. He did this, of course, by giving families and incentive to abandon public schools in favor of private ones. In fact, in a statement given directly after the Florida Supreme Court ruling, Forstmann voiced his support for the privatization efforts in Florida and despite the judge’s ruling he went on to labor persistently to separate schools from government [7].

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National Public Radio gets into the act of advocacy philanthropy

What started in the minds of two, now deceased, entrepreneurial billionaires under the umbrella of ‘advocacy philanthropy’ quickly burgeoned into an educational and political strategy designed to divert public funds from public schools and put them right into the pockets of private schools through a form of leveraged buy-outs of public schools. Free market advocates are of course delighted that their experiment in the leveraged buy-out of public education has made such advances and they are not alone. In fact, the impact of the Forstmann-Walton team-up has created the backwash we see now in the commercialization and privatization of education.

In the state of Florida alone, according to StateImpact, a wing of National Public Radio (NPR):

  • Few Florida students are stuck attending the school around the corner if they are unhappy with that school’s performance. From magnet, charter, single-sex academies and offering businesses tax credits to provide private school scholarships, Florida is a national leader in the move away from mandating attendance in the local school district.
  • The goal is to allow parents and students to choose the school that works best for them, and to encourage traditional public schools to improve their performance. School choice includes public options, such as specialty magnet programs and charter schools, run with public funds.
  • Choice also includes private options such as the Florida Tax Credit Scholarship Program for businesses and other donors who fund private school scholarships for low income students. Nearly 29,000 students received a private school scholarship during the 2009-2010 school year, according to the Florida Department of Education.
  • The Florida Supreme Court struck down a private school voucher program in 2006.
    Florida school choice also includes the McKay Scholarships, which allows K-12 students with disabilities — including intellectual, vision, hearing or learning — to choose to attend another public or private school. More than 22,000 students received a McKay Scholarship during the 2010-2011 school year.
  • Earlier this year Gov. Rick Scott, a Republican, signed legislation that makes it easier for students to transfer to public schools outside their district, allows good charter schools to expand more quickly, expands McKay Scholarship eligibility, increases business tax credits for scholarship donations and allows the Florida Virtual School to offer elementary school courses (http://stateimpact.npr.org/florida/tag/school-choice/).

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NPR, once touted as an independent voice, is the recipient of its own advocacy philanthropic funds. The organization recently received $1,000,000 from The John D. and Catherine T. MacArthur Foundation (http://maps.foundationcenter.org/rss/grantsfire/index.php?id=17). Thus, it is no surprise that NPR serves as a mouthpiece for such advocacy philanthropy and public school devastation.

But there’s more: after more than three decades with The Washington Post, executive Boisfeuillet (Bo) Jones Jr. announced in November of 2011 that he would become President and CEO of MacNeil/Lehrer Productions, which produces “PBS Newshour” [8].

Jones was Chairman of The Washington Post immediately before this announcement. The Washington Post, readers might know, is the parent company of criminal syndicate Kaplan University and Kaplan Tech. Yet it doesn’t stop there, for Jones is also a trustee of the Community Foundation for the National Capital Region, a not-for-profit organization that assists the one percent in ‘philanthropy and estate planning’; so central to tax avoidance and advocacy philanthropy. The ‘non-profit’, not surprisingly, is fully invested in hedge funds and Wall Street financial instruments [9].

In order to capture the shrinking market for their ‘news’, the increasingly privatized PBS broadcasters planned in fall of 2011 a forceful effort to raise money from wealthy supporters [10].

The begging at the feet of the one percent was supposed to start in October of 2011, with a pledge drive aimed at the wealthy. However, Newshour announced that the imploring was to be postponed until January of 2012.

All over the globe billionaires posing as philanthropists are buying newspapers, radio spots and media ventures to push their conservative charitable ventures. The Koch Brothers are now poised to buy the LA Times newspaper. No LA newsroom is close to even half the size of the Times‘ 500-person editorial staff, reduced as it is from its peak a decade ago. With a sock-puppet press these billionaire advocacy philanthropists are set to seize the minds of more and more American citizens [11].

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Advocacy philanthropy and how the CSF accomplished its mission to destroy public education

The question is often asked: How could the CSF accomplish its mission to destroy public education through the leverage buy-out using advocacy philanthropy?  The answer is effortless: With two simple steps.

First, the necessity was to create through advocacy philanthropy the material conditions to persuade parents to abandon public schools in favor of private schools or private choice by using private scholarship funds donated by wealthy benefactors to help them pay tuition. Secondly, there was the need to unceasingly promote the ideology of educational privatization as sound, economic, social, individual and educational policy. For this, CSF and likeminded organizations needed a supplicant press and hardwired think tanks, as Lewis Powell suggested [12]. They had both.

Private advocacy philanthropy furthered the CSF mission much as it does today, by reducing public assistance in favor of private assistance, thereby “starving the beast”, in the words of Grover Norquist [13]. The difference today, of course, is that the ‘beast’, public entities, states and cities, are cash strapped due to the Great Financial Crisis of 2008 and the Department of Education, once the bulwark of public protection, is now simply a privileged subsidiary of privatize philanthropists like the Lumina Foundation and The Bill and Melinda Gates Foundation, to name just a few.

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Of course contributors to CSF say they donate money simply in an effort to help children, especially minority, low-income children. But a look at the record of the organization’s founders raises disturbing questions about their motives and morals. A look at the leaders of CSF reveals that as early as 2000:

  • John Walton was not only the founder of the School Futures Research Foundation, a non-profit organization that in 1999 managed a number of California’s charter schools; he also directed at the time a for-profit company, TesseracT Group (formerly Education Alternatives, Inc.), that managed charters and public schools;
  • Walton, a regular speaker on the pro-voucher circuit in the late 90’s, spent a quarter of a million dollars on voucher initiatives in California up until 1999;
  • Seeing teachers’ unions as an obstacle to vouchers, in the late 90’s Walton personally contributed $360,000 toward passage of California’s anti-union Proposition 226, supplemented by $50,000 from his American Education Reform Foundation.This initiative would have allowed teachers to opt out of the teacher unions that represent them. Other prominent voucher proponents, including James Leininger, J. Patrick Rooney, David Brennan, Howard Ahmanson and Richard Devos (via his Amway Corporation) also contributed substantial amounts to the initiative at the time. Many of these so-called philanthropists are still engaged in privatization efforts with DeVos spearheading voucherization efforts from Pennsylvania to Indiana [14];
  • Forstmann donated $10,000 to help secure passage of California’s anti-affirmative action Proposition 209. Proposition 209 now prohibits the use of race when assessing qualifications for government positions, government contracts, and admissions to four-year universities and state colleges;
  • As stated earlier, Forstmann’s leveraged buy-out firm attempted to acquire one-third ownership in Whittle Communications, the creator of the controversial Channel One television program in 1999, that injected commercials into the classroom, and of the Edison Project, then a national chain of private schools;
  • James Leininger, co-founder of CEO San Antonio and director of CEO America, also founded several religious right organizations, including the American Family Association, the Family Research Council, and Focus on the Family.  His A+ Pac for Parental School Choice supported the campaigns of state and local pro-voucher candidates in Texas, including now-governor Rick Perry;
  • The Walton Family Foundation and the Foundation of Ohio voucher proponent David Brennan contributed half a million dollars for Brennan to set up two private, for-profit voucher schools in Cleveland immediately after the state legislature enacted voucher programs;
  • California venture capitalist Tim Draper, who pushed for a voucher initiative on the March 2000 ballot that was resoundingly defeated, continues to invest heavily in education related companies seeking profits [15];
  • Ex-felon, and multi-millionaire Michael Milkin, has turned from junk bonds and incarceration to schools, with investments of $500 million in education-related companies that include a partnership with Former Education Secretary William Bennett and K12, Inc. Currently, for those families who choose to home school their children William Bennett’s K12®, a provider of home school curricula, is recommended by CSF.  K12® offers significant discounts to homeschooling families who receive CSF scholarships [16].

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Following the private scholarship fund’s conception, a whopping 1.25 million low-income parents from 20,000 communities applied for private foundation scholarships through CSF, fueled by advocacy philanthropy. Winners of the random drawing or lottery were awarded scholarships to private schools of their choice — secular or otherwise.  Families had to qualify by demonstrating financial need, measured by standards similar to those adopted by the federal school lunch program. Eligibility was restricted o students in grades K-8, because the CSF specifically maintained that the earlier a child receives “sensible schooling”, the more likely he or she will become a successful learner.

The advocacy philanthropists could see by the early decade of 2000 that their leveraged buy-out plans were wildly more successful than their initial expectations.  In 1999 nearly 40,000 children in over 7,000 private schools nationwide benefited from the CSF four-year scholarships as part of the CSF mission to unlock the doors to what supporters like to refer to as “innovative educational opportunities” [17].

The demand for private scholarships was even greater that the Children’s Scholarship Fund had dreamed. By March 31, 1998, the parents of more than 1.25 million children had applied for private scholarships. Since the first scholarships were awarded in 1999, CSF has provided $524 million in scholarships to more than 130,000 low-income children nationwide [18]. This is a mind-boggling response when one bears in mind that these applicants are low-income families who must fork over $1,000  a year, on average, to supplement the tuition costs only partially paid for by CSF.  Philanthropy indeed

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Throughout the 1990’s CSF was a formidable player in deleveraging public schools with advocacy philanthropy.  Currently, partnering with CSF are mega banks and corporations who boast of ‘corporate matching’ for parents seeking to abandon public schools.  Some of the current corporations involved with CSF are:

Ameriprise Financial
Aon Foundation
Ariel Investments, LLC
Bank of America Matching Gifts
BlackRock Matching Gift Program
BNY Mellon Community Partnership
The Carlyle Group
DeWitt Stern Group, Inc.
GMR Marketing
GoodSearch
Google Matching Gifts Program
JPMorgan Chase Foundation
Microsoft Matching Gifts Program
Rothstein Kass & Company
Scitor Corporation
Stephen Joseph Companies
Time Inc.
Valassis Communications, Inc.
Williams Lea
Yahoo! Matching Gifts Program
ZBI Employee Allocated Gift Fund [19].

To understand how advocacy philanthropy has taken the reigns of educational policy in the US, one need only to look at CSF and how their founders quickly moved their educational agenda to other states across the US.  An astonishing 43% of the eligible population in Newark, NJ, applied for scholarships in 1999. In New York, 168,000 applications came in – representing 32% of those eligible to apply. Other cities with especially notable numbers of applications included Los Angeles (26% of those eligible), Baltimore (38%), St. Louis (32%), and Philadelphia (35%). Parents all over the country were sending the same message: They wanted alternatives for their children’s education, and they were willing to pay something out of their own pockets to get it.  The CSF national headquarters in New York currently administers more than 8,300 scholarships in New York City, as well as providing matching funds and program support for the partner programs nationwide [20].

Besides wielding vast political and economic power, as well has bequeathing hefty donations to California’s campaign for the passage of that state’s anti-affirmative action legislation, Proposition 209, Forstmann along with former Education Secretary William Bennett and former HUD Secretary, Jack Kemp (now also deceased), in 1993 founded another right wing front group: Empower AmericaEmpower America was conceived as an advocacy philanthropy group that would steer the Republican Party back to power along a new conservative road after its loss to Bill Clinton in the 1992 presidential race. Sadly, as we will see, this was hardly necessary for President Bill Clinton and the corporate democrats favored the growth of privatization in all aspects of life — from banking to education.

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Advocacy philanthropy and charitable choice

As we have seen, advocacy philanthropists work hand in hand with the religious right in order to dismantle public education, transfer public funds into private hands and provide for the wholesale destruction of the educational commons. Moreover, their work is not party specific but extends the entire gamut — from corporate Republicans to corporate Democrats.

Most people think of Republicans and John Ashcroft when they think of “charitable choice” but in July 1996 when President Bill Clinton signed the Personal Responsibility Act into law as part of the Welfare Reform Act, it included a little known segment, Section 104, commonly referred to as “charitable choice”. Representative from Indiana at the time, Mark Souder, a Republican, summarized the legislation in crystal clear terms:

The US House of Representatives passed a bill that would strengthen the partnership between government and religious institutions in providing housing for the nation’s low-income, elderly and disabled citizens and administer and provide services to beneficiaries under any program that permits contracts with organizations or permits certificates, vouchers, or other forms of disbursement to be provided to beneficiaries as means of providing assistance [21].

This, of course, also meant education.

Religious leaders and philanthropic advocates were delighted, even giddy when the bill passed.  The bill not only provided that “faith based charities” would not have to sacrifice their religious purpose in order to “partner” with government, but it also provided for federal block grants to states to decide how, when, and what funds would be dispersed, through which charitable agencies and for what purposes.  Now religion would be subsidized by the state.  This legislation proposed and passed by corporate democrats, also played nicely into the hands of states’ rights advocates who had long sought to eliminate all federal public policy in education in favor of decentralized local control.

Under the charitable choice plan those who now seek social services, such as low-cost housing, or drug rehabilitation, would receive services at taxpayer expense.  Charitable choice also allows pure private choice advocates separating schools from government. This was a coup d’état for advocacy philanthropists and their reactionary right wing friends.

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The ragged trousered philanthropist

Unfortunately, too few people question what a philanthropist really is or the motives of the advocacy philanthropists when they claim to care so much about education.  For example, many people believe that the Walton Family, owner of Wal-Mart got into the philanthropic business of “helping children” due to an unbridled ethical commitment to the low-income student and the down and out.

However, according to the website, “The Walmart One Percent: Meet the Waltons”, in a June 2011 speech to the graduating class of the private school her son Lukas attended, Christy Walton, now the co-chair of the Children’s Scholarship Fund, explained that her family became involved in K-12 education reform because their business — presumably Walmart — “was having trouble finding qualified people to fill entry-level positions” and because the family believed that “the education being provided [in public schools] had been dummied [sic] down [22].

In other words, stocking the shelves with children who could eventually create surplus value or profit was and is really the force that drives the Walton Family’s educational advocacy philanthropy.  This is also true for all the other advocacy philanthropists that work to turn public policy in the direction of fundamentalist free market principles.

In 2012, Kenneth Libby, an independent investigative researcher, formerly with Schools Matter, took a look at the educational programs funded by the Bill and Melinda Gates Foundation.  What he found was:

The foundation more than tripled the number of grants dedicated to development between 2008 and 2010. In addition to funding more development projects, the foundation allocated $13 million to Common Core State Standards in 2010, up from just over $600,000 two years prior. Human capital projects, largely a side project in 2008, became a centerpiece of the foundations work in 2010.

Interestingly, Libby’s research found that donations to think tanks were up by 66.7%, conference seminars and summits spiked at 53.3% and donations to ‘media’ were up 128.6% during the years 2008-2010. None of this is surprising for it fits directly into the advocacy philanthropic paradigm we have been speaking of [23].

Libby also looked extensively at many of the 61 other philanthropy foundations and how they spent their monies between 2001 and 2010. What he found was that the majority of them were conservative, market fundamentalists dedicated to the dismantling of public education and that they had spent a total of close to $17.5 million dollars in advocacy philanthropy [24].

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As Kenneth Saltman notes:

When Bill Gates and Eli Broad lament the state of public schools, they use a language of economics.  Schools become factories, teachers become managers, and students become widgets.  It is a simple shift, a sleight of hand, to get US citizens to parrot back the assumptions and entailing consequences: schools should produce the same products, teachers should train those products, and students should learn what it means to be a commodity statistic [25].

Alas, Saltman hits the nail right on the head. For advocacy philanthropists, economics and the commodification and monetization of students is what motivates this so-called charitable largess. Never do human moral concerns clothe the debate about what it means to be an educated person – moral concerns such as an appreciation for diversity, equity in education, participation in power and decision making, or an appreciation for what makes us human.

In fact, corporatists like Gates want to keep any critical analysis of corporatism out of the educational debate; for placing the critical lens on the work of advocacy philanthropy would reveal its moral bankruptcy, heightened self-interests and the commodification and commercialization of what it means to be human. This is why the advocacy philanthropists and their paid sophists push fast track classes, alternative certification, school-to-work paradigms and cyber learning.  Critical examination of the corporatist’s model of education is to be prohibited in the halls of ‘learning’, as is liberal arts and humanities — so dismembered education becomes the idea de jour.

In 2006, Slavoj Žižek, then the international director of the Birkbeck Institute for the Humanities, University of London wrote a satiric piece on philanthropy entitlted: “Nobody has to be vile”.  In it, he wrote about what he calls the “liberal communists”. And just who are the “liberal communists?

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According to Zizek:

Liberal communists are top executives reviving the spirit of contest or, to put it the other way round, countercultural geeks who have taken over big corporations.

Bill Gates is the icon of what he has called ‘frictionless capitalism’, the post-industrial society and the ‘end of labour’. Software is winning over hardware and the young nerd over the old manager in his black suit. In the new company headquarters, there is little external discipline; former hackers dominate the scene, working long hours, enjoying free drinks in green surroundings. The underlying notion here is that Gates is a subversive marginal hooligan, an ex-hacker, who has taken over and dressed himself up as a respectable chairman.

Liberal communists are pragmatic; they hate a doctrinaire approach.

Liberal communists do not want to be mere profit-machines: they want their lives to have deeper meaning.

This isn’t an entirely new phenomenon. Remember Andrew Carnegie, who employed a private army to suppress organised labour in his steelworks and then distributed large parts of his wealth for educational, cultural and humanitarian causes, proving that, although a man of steel, he had a heart of gold? In the same way, today’s liberal communists give away with one hand what they grabbed with the other [26].

Zizek is a clever protagonist on today’s philosophical stage. He is resoundingly humorous and adroitly intelligent. He understands that the new-age capitalist class, mostly financiers have much to lose.  But his rhetoric, though colorful, fails to capture the moment in history we face.

These new advocacy philanthropists are not “liberal communists” they are the new, ruthless face of socialized capitalist exploitation and thus they are neither philanthropists nor charitable givers – they are pickpockets, thieves and exploiters — they are the new, financial conquistadors. To attribute anything more to them or to give them names like “liberal communists” is to mask the true reality of what they do and who they are. They are financial pirates and buccaneers who now profit-off human disposability in an age of surplus labor.

In the novel The Ragged-Trousered Philanthropists by Robert Tressell first published in 1914, there is a notable chapter that one hundred years later articulates who the true philanthropists really are.

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In this chapter Tressell introduces the reader to “The Great Money Trick” (a must read). Here, the main character of the book, a working class character by the name of Owen, organizes a model of existing capitalism with other workers using slices of bread as raw materials and knives as machinery. Owen ’employs’ his fellow workers, cutting up the bread to illustrate that the employer is the man who does not work but generates personal wealth and profit while the workers effectively remain no better off than when they began. They are endlessly swapping coins back and forth for food and wages to barely stay alive. This was Tressell’s hands-on method of illustrating the Marxist theory of surplus value.

Inside the financial rentier system of capitalist development within which we are forced to live, it is through surplus value on a collective scale that profit is derived and how misery, false consciousness, poverty and disillusionment remain hidden and harnessed. For those who are the true philanthropists, those of us who bequeath our labor each and every day to the capitalist class and must work for the one percent or remain indebted to them in order to survive; it is truly we who are the real philanthropists. The question then, is when will we come together as a conscious class force and realize that without human labor, there would be no advocacy philanthropists, in fact there would be no profit at all?

Forstmann is no longer alive, but in 2004 Forstmann, Little and Company stood accused of violating the terms of a contract with one of its investors, the state of Connecticut, by squandering $2.5 billion on two telecommunications companies, McLeod USA and XO Communications, during the height of the telecom bubble. Of that amount, $125 million came from the state of Connecticut and the state sued Forstmann. He died a broken man, seven years later.

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End notes:

1.      http://nymag.com/nymetro/news/crimelaw/features/9472

2.      Andrew J. Coulson, Market Education: The Unknown History (New Brunswick: Transaction Publishers, 1999), p. 75 (as also referenced at http://www.mackinac.org/3254#_edn1)

3.      http://colonialquills.blogspot.com/2011/06/literacy-in-colonial-america.html

4.      Forstmann. “Ted Forstmann Calls for Competition in Education in USA”. http://www.freemarketfoundation.com/issues/forstmann-calls-for-competition-in-education-in-usa

5.      Forstmann. T. (15 March 2000).  “Ted Forstmann to Fund Scholarships for Florida School    Children Abandoned in Court Ruling.” http://www.scholarshipfund.org.

6.      Bloomberg News. (6 January 1999).  “Gingrich Set to Return Home, Will Serve on Advisory Board of  New York Buy-out Firm.” p. 14. Washington Times.

7.      Forstmann, T. “Ted Forstmann to Fund Scholarships.”

8.      http://www.dailycensored.com/public-broadcasting-or-p-bs-the-washington-post-moves-in-on-pbs-newshour/

9.      http://www.thecommunityfoundation.org/site/c.ihLSJ5PLKuG/b.4475715/k.269D/What_WeDo.htm

10.  NewsHour’ Changes Raise Questions at PBS, November 6, 2011, http://www.nytimes.com/2011/11/07/business/media/at-pbss-newshour-departures-questions-and-complaints.html?_r=1

11.  http://www.huffingtonpost.com/kathleen-miles/koch-brothers-la-times_b_3180391.html?icid=maing-grid10|htmlws-main

12.   http://www.dailycensored.com/cornell-university-to-offe

13.   http://www.independent.org/publications/tir/article.asp?a=641

14.   http://www.alternet.org/story/150868/the_devos_family%3A_meet_the_super-   wealthy_right-wingers_working_with_the_religious_right_to_kill_public_education

15.  Coleman, N. (20 April 1999).  “New Report Details Links between Charity and Vested Interests in Campaign against Public Schools.  Children’s Scholarship Fund Head Urged to Target Aid to Public Schools.  People for the American Way. http://www.pfaw.org.

16.    http://www.scholarshipfund.org/drupal1/faqs

17.   Forstmann, T. (27 April 2000). “Utopia: Competition versus Monopoly in Education”. Speech given at the Commercial Club of Chicago. Chicago, Illinois.

18.   Ibid.

19.    http://www.scholarshipfund.org/drupal1/corporate-matching-donors

20.    http://www.scholarshipfund.org/drupal1/history

21.    Section 104 of the Welfare Reform Bill of 1996.  Available through the Texas Department of Human Services. http://www.dhs.state.tx.us.

22.    http://walmart1percent.org/education/

23.    http://shankerblog.org/?p=5234

24.    http://kenmlibby.com/category/philanthropy/

25.   Link

26.   http://www.lrb.co.uk/v28/n07/slavoj-zizek/nobody-has-to-be-vile

eduragged1.1

[Thank you Danny for this groundbreaking piece]

The writer is an educator and an author. He writes for Dailycensored.com.

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2 thoughts on “Advocacy philanthropy and the leveraged buy-out of public schools — Part 2

  1. I may or may not be a “darling,” but I never wrote the quotation that you ascribe to me above. It is false to claim that this text appears on p. 75 of my book “Market Education,” on any other page of that book, or indeed anywhere in anything I have ever written. Please correct the record.
    Yours sincerely,
    Andrew Coulson
    Director, Center for Educational Freedom
    Cato Institute

    1. Dear Friends,

      Over the past day, there have been several email exchanges between Mr Andrew Coulson and myself (as well as between the author of this piece Mr Danny Weil and myself) regarding Mr Coulson’s comment posted above. I have also informed Mr Coulson that I may post a response (as finally appears below) to give some explanation as to what took place.

      Briefly this is what transpired:

      a. Mr Weil got back to me and was willing to issue a retraction in acknowledging that two specific paragraphs associated with Mr Coulson were initially presented inaccurately, that is, that they were not a direct quote from his book. However, Mr Weil requested that no changes be made to his original text but instead have his retraction and explanation about the ‘quote’ posted as a comment by him. Mr Weil then sent a link in which the two problematic paragraphs linked to Mr Coulson – paragraphs 4 and 5 of the text (also referenced in End note [2]) — appeared as opening paragraphs in another article attributing the content of the same lines to Mr Coulson’s book: This is the link to the other article: http://www.mackinac.org/3254#_edn1

      b. In the interests of accuracy changes were made today that followed from the email exchanges that are now reflected in Mr Weil’s article. The reference to Mr Coulson’s book now added the connection that the problematic paragraphs have to the link where they appeared 12 years ago. Mr Coulson then stated that the lines linked to him in those paragraphs are still inaccurate in relation to his book. What is interesting is that hours after Mr Weil’s post appeared, Mr Coulson’s objection was made. However, an apparent inaccuracy in the form of the opening paragraphs of a piece from over a decade ago remains in the public domain uncorrected. Mr Coulson stated in an email to me that Mr Weil’s use of an inaccurate attribution to him second time around is not to be expected in proper scholarship. The first error does not justify it repeated second time around.

      Mr Coulson also implied that the paragraph following the two referenced to him (paragraph 6 of the text) in Mr Weil’s piece was also inaccurate as it was not supported by the content of his book.

      c. Mr Coulson was then given the opportunity to post comments to reflect his point of view on the matter so as to clarify his position regarding Mr Weil’s apparent inaccuracies as well as that sustained by the previous article referenced. However, I did stress to both him and Mr Weil that comments on the matter should be free of any animosity. I stated this as there were references in Mr Coulson’s emails that were quite critical of Mr Weil.

      Finally, in response to engaging in a discussion with Mr Weil and possibly others through comments to be posted below the essay, Mr Coulson replied that as I did not seem to take my responsibilities as a publisher seriously in allowing such inaccuracies to stand, he saw no reason to respond in the form of a discussion. And that while he likes an exciting debate and is open to disagreement he affirmed that he will not have anything to do with this site. He further hopes that standards for the site and expectations from contributors will be raised.

      We respect Mr Coulson’s views and have duly taken note of his comments. We also, in all goodwill wish him: Good night and good luck. Thank you for reading this.

      Sanjay Perera
      Editor, Philosophers for Change

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