by Chris Whittle
269 pp. Riverhead Books, $24.95
Chris Whittle, declared the financial journalist Christopher Byron in 1999, is a man "possessed of his own sense of visionary infallibility--and the baloney-spouting skills of a Harold Hill." That's a pretty accurate characterization of the Chris Whittle of old, except that, unlike the Music Man, he was ingenuous--not a conscious deceiver but a species of essential entrepreneur, the kind driven by what John Maynard Keynes called "animal spirits" and a "spontaneous urge to action."
Mr. Whittle's urge to action brought success to his first businesses--mainly a string of cleverly financed special-interest magazines and a controversial in-school TV news program, supported by commercials, called Channel One. It all added up to "twenty-five years of almost uninterrupted upward trajectory," Mr. Whittle writes in Crash Course (Riverhead Books, 269 pages, $24.95), a memoir and manifesto.
By the late 1980s he had come to believe, he confesses, that "up was the only direction we could go. I was wrong--and things went wrong." After a long and painful journey, Mr. Whittle is still an entrepreneur but now a chastened one. "Some people like to build new houses," he writes. "I'm a renovation man." There is something sad about this confession; he surely didn't start out that way.
Even in 1991 Mr. Whittle was (so to speak) building new houses. It was then that he proposed a scheme for shaking up American primary and secondary education: He would build 1,000 for-profit schools in five years, at a cost of $2.5 billion. To run them he hired away the president of Yale University, Benno Schmidt--a feat recorded on the front page of the New York Times--and put on his payroll such academic luminaries as John Chubb and Chester Finn.
Edison Schools, as the venture was called, instantly bled cash but still attracted funding from the likes of Time Warner, J.P. Morgan Capital Corp. and the venture arm of Donaldson, Lufkin & Jenrette Securities. In 1999, after $112 million in accumulated losses, Mr. Whittle launched an initial public offering, raising $173 million. Three years later Edison's stock had dropped 98%. In 2003, with $60 million in loans in default, Mr. Whittle took the company private again. Today, instead of owning 1,000 private schools, Edison merely manages 157 public ones. Quite a comedown.
What happened? Edison had nowhere near the funding to construct such a gigantic enterprise so quickly, and Mr. Whittle and Mr. Schmidt lacked management skills and patience. After early setbacks in starting his private schools, Mr. Whittle decided to switch focus entirely and sought management contracts from urban school boards. With no experience dealing with big-city unions and politicians, Edison blundered into disaster after disaster. "Too often," writes Mr. Whittle, "what rules schools is politics, not grades." He should have recognized that fact earlier and stuck to creating his own low-cost schools.
Mr. Whittle hasn't given up thinking about schools even if Edison has trimmed its sails. Crash Course includes a wistful chapter about what K-12 education might look like in 2030, run by fantasy global firms like Grawson (read Edison) with $25 billion in annual revenues. His epilogue of "letters to leaders" (union bosses, President Bush, Sen. Ted Kennedy) reads like the ramblings of Saul Bellow's hero Moses Herzog. But unlike the belligerent Herzog, Mr. Whittle assures the powerful to whom he writes that they have nothing to fear from him. Privatization? "I propose nothing of that sort."
Among other things, Mr. Whittle wants students to tutor students, technology to run rampant and teachers to be less numerous but better paid (with up to $85,000 in base salary). It is impossible to say whether he is right about how to structure schools or teach kids. If a school were a normal marketplace participant--like a restaurant or a software manufacturer--we could test such propositions in the crucible of competition. That's where the answers are, and competition is what education needs. Mr. Whittle's for-profit schools, even a couple hundred of them, would have helped enormously.
Instead Edison has become an education management organization, or EMO, running public schools with tax dollars. Arizona State University reports that, at the end of 2004, there were 59 such for-profit companies managing 535 schools with 240,000 students. That's a tiny number--less than a half of 1% of the K-12 population--but it has grown from 142,000 three years ago, thanks mainly to the rise of charter schools. Such schools are part of the normal public system but are operated by groups of parents and teachers, by nonprofit organizations or, in about 15% of the cases, by EMOs.
But public schools--and not a few private ones--are still constricted by rules laid down by politicians and unions. These rules dictate how teachers can be hired and fired, what the structure of the school day must look like and which curriculum must be used. The new Chris Whittle has resigned himself to working within this stultifying system. His big proposals are for the feds to fund education research and development at $4 billion a year and to create universities to educate principals. He wants more public systems to hire EMOs to run their failing schools.
Such incrementalism won't work. Writing in the most recent issue of the Cato Journal, John Merrifield and David Salisbury call the current education system a "gold-plated disaster" and argue that competition requires, at the very least, low regulatory barriers to entry for new schools, swift and assured failure for poor schools and the chance for schools to specialize if they want to do so.
The chastened Chris Whittle wouldn't go for something so drastic. He writes about "education's Stockholm syndrome"--a reference to a Swedish incident in which hostages sided with their captors. His point is that "all of us are 'captives' of our own childhood experience" and the old-fashioned school we knew as kids is our ideal. But Mr. Whittle's own Stockholm syndrome is something else entirely. Both Crash Course and Edison's trajectory show that he has capitulated to the public-education establishment and lost his revolutionary zeal. Bring back the days of visionary infallibility and baloney-spouting.
James K. Glassman is a resident fellow at AEI.