Government as venture capitalist?

Charles Lindberg. Image from Stinkie Pinkie's site on flickr.com/creativecommons

On the Marketplace radio program this evening, “Freakonomics” co-author Steve Dubner compared the Obama administration’s Race to the Top grant competition to innovations and competitive prizes in the private sector.

After talking about the X Prize (slogan: Revolution Through Competition) and Google’s practice of giving engineers a day each week to try out their own ideas — even though most of them flop — Dubner played a tape of the following statement and asked the host, Kai Ryssdal, to guess who the speaker was:

Well we’re fundamentally trying to change the business we’re in and we’re trying to drive innovation rather than being in this compliance-driven bureaucracy. And the idea of crowdsourcing that you’re seeing in other industries, we think is absolutely applicable here. The only way you challenge the status quo is to give people rewards for success.

For Ryssdal, it was a no-brainer: Arne Duncan, the Secretary of Education. You can listen — or read — the full Marketplace segment here. Below is an excerpt of the conversation that followed:

DUBNER: Nicely done. And the reason I’m playing you this tape is because Duncan, in the Obama Administration, has launched this program called Race to the Top, which is trying to give states a lot of money for their education departments if they can come up with experimental ways to innovate. Now here’s what I really like–

RYSSDAL: Oh wait! Wait, wait, wait. I have the quiz answer, it goes like this: this is, if you roll Google and the X Prize and Arne Duncan and government all into one, it’s all about government not being like government, right? Government being like business?

DUBNER: Gold star for Kai Ryssdal. That’s exactly right. So we’re getting a lot of experimentation in the means of competition. And this fall we’re already seeing some payoff; schools in winning states are gathering new data to help them track each student’s progress from year to year. Delaware, one of the Race to the Top winners, has set up an experimental office to measure teacher skill, with the goal of figuring out what makes a great teacher and then learning how to recruit more of them. So the government is acting a bit like a venture capital firm, right? Placing bets on a lot of different ideas, many of which are bound to fail. But that’s kind of the point: fail hard, fail fast, and let the winning ideas rise to the top.

So Kai, remember this: the reason Charles Lindbergh flew across the Atlantic Ocean was to win a cash prize — $25,000. When I asked Peter Diamandis of the X Prize Foundation what all of us got for that prize money, he had a very simple answer: the aviation industry.

After hearing this, my first thought went to the education researchers, such as Diane Ravitch, who have raised concerns about the lack of evidence behind the education reform policies promoted by the Obama/Duncan administration.

It never occurred to me, until now, that maybe that was the whole idea.

Katy Murphy

Education reporter for the Oakland Tribune. Contact me at kmurphy@bayareanewsgroup.com.

  • Sharon

    Finland reinvented its educational system a generation ago, and in doing so has produced the top system in the world. Student results demonstrate its superiority.

    The underpinning of the grand ed reform experiment in the U.S. (creative destruction, investing in a disruptive force, venture philanthropy) is light years away from the now-time-tested and proven strategy being used in Finland. Here’s Pasi Sahlberg’s (Finland’s education minister) comparison of the two:

    Global educational reform movement [ours]
    -Teaching core subjects
    -Test-based accountability
    -Race to the top
    -Renting reform ideas: Adopting educational reform ideas from corporate world and scientific management. Hiring private sector experts as leaders.

    Education policies in Finland
    -Broad and creative learning
    -Professional responsibilities
    -Slow learning
    -Owning a dream: Building a shared inspirational vision of what good education system school and teaching look like. Appointing education professionals to leadership positions.

    By the way, Stephen Dubner is a journalist/author who co-wrote Freakonomics with Steve Levitt. Levitt teaches economics at the University of Chicago, as did Milton Friedman. Friedman is credited with developing the Chicago school of economics, a school of thought which promotes “free market” libertarianism, sometimes known as neoliberalism.

    This economic practice is what is responsible for the transfer of a huge proportion of our prisons and military into private hands over the past two decades. Make no mistake, years ago, the proponents of this mentality set their sites on dismantling the public schools because they strongly believe in privatization. After the failed attempt of vouchers, the shift focused on charters as a way to make privatization happen. Friedman felt public schools should be entirely eliminated. Reagan and Schwarzennegger have been huge Milton Friedman fans.

    Read Naomi Klein’s “Shock Doctrine” to learn the full story about how neoliberalism has played out across the world; to me it’s horrifying. In the book we learn that the prescriptive shift to induce privatization ALWAYS happens just after a crisis, either real (natural disaster) or manufactured (propaganda). That’s what the “educational crisis” is all about; a great deal of propaganda has whipped everyone up. There is an established formula for how to proceed.

    Underneath what’s being done to public schools today has everything to do with the privatization of public educational institutions in order to further the absolute dominance of corporate power. It has little to do with improving the outcome for poor kids.

    Here’s more about Finland’s authentic approach to improving education: http://perimeterprimate.blogspot.com/2010/10/finlands-approach-to-education.html

  • Sharon

    PS: The above is exactly why today’s education reformers are ignoring research and evidence. The proven strategies, such as those discovered by Finland, are irrelevant to their ultimate goal.

  • JR

    Ignoring evidence?
    The education system has been below average for three decades, and reformers of sorts have only been engaged in this struggle for a decade and a half. Where was the concern of the education establishment in all that time. Except for a core of wonderful dedicated teachers the education system has concerned itself with politics,pay,perks and pensions not pupils. The education system just needed more money for the kids, while ignoring the fact that the U.S. spends more per capita on the education of it’s children than any other country on earth by far. We just needed district reading and math specialist’s(KA…CHING!!!!more money)intervention specialists(KA…CHING!!!!!more money)Paraprofessionals(KA…CHING!!!!!) and now we have this money hungry bloated education system that is just worried about how to sustain its dominance at the public tax money trough so it can continue to gorge itself. You wanna talk about having little to do with improving outcomes for kids, the unions ought to use this for their motto “Forget about measuring progress and measuring relative achievement and teacher quality, just trust us and give us more money, and we’ll fix it, trust us! Yeah, we have trusted you thirty or forty years too long. Where is the real greed here, and what about their ultimate goal, to do as little as possible for as much pay as is possible.

  • Cranky Teacher

    JR, I would like to see your evidence on per capita spending. Do you have a link or some numbers?

    It is an interesting claim but I would like to see some evidence.

  • JR

    I should have said near the top(top 5 infact) which is pathetic when our results are not even in the top 20.


    This is older data

    Here are newer grim stats!


    We should be near the top in results, but we aren’t even close.

    There is more, but I am getting sick just looking at it.

  • JR

    We are spending more than 5-10 countries that are out educating our kids in the US, and we should be ashamed.

  • Ms. McLaughlin

    Ms. Murphy’s probably read this. It’s rather long, but important, and there’s quite a little section on the small school experiment in Oakland.

    “The Corporate Surge Against Public Schools,” by Steven Miller and Jack Gerson (2008).


    What they said.

  • oakie

    I think Sharon’s hobgoblin is private enterprise.

    I think Dung Xiao Ping said it best: black cat, white cat, whatever catches mice is the best.