New Book Defines Neoliberalism, Challenges Elite Charade of Changing the World

Betsy DeVos, our current U.S. Secretary of Education, is easy to peg.  She’s an education libertarian who has been known to declare, “Government really sucks.” She believes in the glory of private markets and has an added commitment to religious education and using government money to help parents pay for it.

But how do we accurately name and fully explain to ourselves the thinking of people like Arne Duncan and Barack Obama, Bill and Hillary Clinton, and the people who call themselves Democrats for Education Reform? These Democrats want to divert public tax dollars away from the traditional public schools—which continue to serve over 50 million American children—to unregulated private contractors called charter schools. How did school privatization become bipartisan, with conservative Republicans like DeVos favoring vouchers and Democrats enthusiastically supporting charters? Turning so-called “failing” public schools over to Charter Management Organizations, if you will remember, was one of the “remedies” of the bipartisan, Bush-era No Child Left Behind Act, and of Race to the Top, the project of Obama-era Democrats.

In his new book, Winners Take All: The Elite Charade of Changing the World, Anand Giridharadas helps us out here.  While much of the book focuses on current trends in the philanthropic sector, Giridharadas also defines the values that have become a new kind of conventional wisdom about public policy in our now alarmingly unequal society.  Giridharadas provides the data depicting the incomes of the rest of us next to those in the top One Percent and the top .001 Percent.  He describes the kind of inequality that separates the rich and the poor but leaves the rich with all the power when it comes to framing solutions to unequal healthcare, for example, or a public education system that has, following residential trends, become increasingly segregated by economics as well as race—schools with radically unequal funding that provide radically disparate access to opportunity.  Giridharadas does not explore these social and economic challenges in themselves, nor does he suggest solutions. Instead he chooses to delineate all the ways powerful elites have assigned themselves responsibility for solving the problems—and to describe the injustice that follows when the voices of the rest of us are absent from the conferences at Davos or Aspen.

Giridharadas defines neoliberalism, a term that gets thrown around all the time these days but is infrequently explained. Giridharadas adopts the simple definition of anthropologist David Harvey: Neoliberalism is “a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade… (D)eregulation, privatization, and withdrawal of the state from many areas of social provision tend to follow.  While personal and individual freedom in the marketplace is guaranteed, each individual is held responsible and accountable for his or her own actions and well-being.  This principle extends into the realms of welfare, education, health care, and even pensions.”  Giridharadas adds, quoting from the thinking of political philosopher Yascha Mounk, that we have entered a “new age of responsibility in which responsibility—which once meant the moral duty to help and support others—has come to suggest an obligation to be self-sufficient.” (pp. 18-19)

All this has created a new ethos on many college campuses, particularly on campuses where the business and investment sectors are underwriting centers to promote “social innovation” and “social entrepreneurship,” or where students are becoming interns or fellows in financial firms, which push students to imagine their futures and do well by doing good: “Change the world. Improve lives. Invent something new. Solve a complex problem. Extend your talents. Build enduring relationships.” (p. 24) And the way this can happen, students are told, is by going to work for business or the financial sector to address alarming inequality and its many challenges or applying for a grant from a huge foundation whose endowment has exploded as massive untaxed profits have accumulated.  Giridharadas continues: “Nowhere is this idea of entrepreneurship-as-humanitarianism more entrenched than in Silicon Valley, where company founders regularly speak of themselves as liberators of mankind and of their technologies as intrinsically utopian.” (p. 47)

Giridharadas names today’s ethos “marketworld”:  “Marketworld is an ascendant power elite that is defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo.  It consists of enlightened business people and their collaborators in the worlds of charity, academia, media, government, and think tanks. It has its own thinkers, whom it calls thought leaders, its own language, and even its own territory—including a constantly shifting archipelago of conferences at which its values are reinforced and disseminated and translated into action.  MarketWorld is a network and community, but it is also a culture and state of mind. These elites believe and promote the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform.” (p. 30)

What about the role of government, which most of us think of as the institution protecting the rights of individuals and marginalized groups and providing oversight to protect society from the inevitable negative externalities of capitalism?  Instead in MarketWorld, it is believed that government and the private sector can work together in a “win-win” for everybody:  “People typically think of government and market working in opposition to each other—and regulation being the tool by which government constrains the market… This new ideology believes that government is an investor in capitalism. The government works not as a check on capitalism but for capitalism—to make capitalism successful, to ensure that the conditions for its success are in place: that there is a decent education system to produce the requisite number of workers, that trade agreements get written so as to allow companies to buy from and sell to far-off places; that the infrastructure allows trucks to get produce to the supermarket before it rots; that the air is clean enough that people live long and (more important) productive lives.” (p. 48)

The example from education, of course, is the diversion of billions of dollars from the states’ public education budgets over a twenty year period to unregulated, private contractors called charter schools. The neoliberal justification has been that charters embody the business school values of innovation and disruption. The charter school sector is among America’s biggest experiments with social entrepreneurship paid for by government.

The Nobel Prize winning economist Joseph Stiglitz sums up the overall economic problem that is the focus of Giridharadas’s book: Powerful businesses and giant philanthropic foundations have found ways to pretend to address the economic catastrophe we face today in American society.  But there is no way, according to Stiglitz, that this arrangement can possibly address the problems that derive from inequality: “Like the dieter who would rather do anything to lose weight than actually eat less, this business elite would save the world through social impact investing, entrepreneurship, sustainable capitalism, philanthro-capitalism, artificial intelligence, market-driven solutions.  They would fund a million of these buzzwordy programs rather than fundamentally question the rules of the game—or even alter their own behavior to reduce the harm of the existing distorted, inefficient and unfair rules. Doing the right thing—and moving away from their win-win mentality—would involve real sacrifice; instead, it’s easier to focus on their pet projects and initiatives..”

Stiglitz, the economist, explains that eliminating inequality will inevitably require changing the system itself in a way that challenges today’s One Percent.  After all, we’ll need to address, for example, what businesses pay and how they treat their employees and increase taxes (which will incidentally reduce the endowments and power of today’s mega-philanthropies): “In order to really have an economy with the greatest opportunity for all, the kind of economy they seem to champion, the MarketWorlders would have to pay high levels of corporate and personal income tax, offer decent wages to their workers, allow unions, fund public schools (instead of pet charter projects) and support some form of single payer health care and campaign finance reform. One simply can’t arrive at a more economically equal reality when the rungs of the ladder are so far apart.”

Giridharadas’s book works best as a descriptor of a dangerous ethos at work among the powerful. In his preface, however, he challenges the power of neoliberalism: “What is at stake is whether the reform of our common life is led by governments elected by and accountable to the people, or rather by wealthy elites claiming to know our best interests. We must decide whether, in the name of ascendant values such as efficiency and scale, we are willing to allow democratic purpose to be usurped by private actors who often genuinely aspire to improve things, but first things first, seek to protect themselves… We must ask ourselves why we have so easily lost faith in the engines of progress that got us where we are today—in the democratic efforts to outlaw slavery, end child labor, limit the workday, keep drugs safe, protect collective bargaining, create public schools, battle the Great Depression, electrify rural America, weave a nation together by road, pursue a Great Society free of poverty, extend civil and political rights to women and African Americans and other minorities, and give our fellow citizens health, security, and dignity in old age.” (pp. 10-11)

Personal Grit Won’t Do It; We Must Address Structural Inequality

It’s becoming clear that the American Dream is increasingly a myth, that America is not really a meritocracy, and that it’s become virtually impossible to “pull yourself up by your bootstraps” these days if you are very poor.  The Nobel Prize winning economist Joseph Stiglitz describes today’s America: “The simple story of America is this: the rich are getting richer, the richest of the rich are getting still richer, the poor are becoming poorer and more numerous, and the middle class is being hollowed out… Disparities in household income are related to disparities in wages and in wealth and income from capital—and inequality in both is increasing.” (The Price of Inequality, 2012, p. 7)

Among poor children, income inequality is reinforced by unequal access to education and our society’s fragmented and uneven attempts to do anything about it.  Sociologist Karl Alexander and colleagues at Johns Hopkins University explain the results of a longitudinal study that has tracked the lifetime trajectory of students who were first graders in Baltimore in 1982.  Alexander and his colleagues remind us that for students they call “the urban disadvantaged,” social mobility has always been lacking and our attempts to assist children sporadic and inadequate: “There is no simple or single solution to children’s academic challenges.  Rather, small influences accumulate to produce large and lasting consequences… We believe that help at strategic points could boost prospects for more of the urban disadvantaged to get ahead through school.  For disadvantaged children, however, the school improvement agenda typically is served a la carte or piecemeal.  Many reforms have been tried and some of them hold great promise, but as a society we have yet to implement those reforms systematically in concert and with a sustained commitment.” Alexander and his colleagues suggest that if we did all of the following and did them systemically, it might make a significant difference: provide high quality preschool; address the residential segregation that defines hypersegregated, hyperpoverty neighborhoods; reduce class size; provide engaging summer and after-school programs; ensure well-qualified, well-prepared and well-compensated teachers in the poorest communities; ensure challenging standards and curricula with instructional scaffolding to ensure that children can achieve what is expected; integrate schools economically; and make classrooms respectful of all cultures and the needs of all kinds of parents. (The Long Shadow, 2014, pp. 178-179).

Sociologist Patrick Sharkey explains that economic inequality too often tracks race: “(B)eing raised in a high-poverty neighborhood is extremely rare for whites… but is the norm for African Americans.  Among children born from 1955 through 1970, only 4 percent of whites were raised in neighborhoods with at least 20 percent poverty, compared to 62 percent of African Americans.  Three out of four white children were raised in neighborhoods with less than 10 percent poverty, compared to just 9 percent of African Americans.  Essentially no white children were raised in neighborhoods with at least 30 percent poverty, but three in ten African Americans were.  These figures reveal that African American children born from the mid-1950s to 1970 were surrounded by poverty to a degree that was virtually nonexistent for whites.”  (Stuck in Place, 2013, pp. 26-27)

Focusing on families in the white middle class during the decades Alexander and Sharkey describe, Robert Putnam explains: “Though it might seem natural to label them ‘self-made,’ in many unnoticed ways they benefited from family and community supports that are nowadays less readily available to kids from such modest  backgrounds.  They grew up in an era when public education and community support for kids from all backgrounds managed to boost a significant number of people up the ladder…. Those supportive institutions, public and private, no longer serve poorer kids so well.”  Putnam notes that today’s inequality makes it difficult for those who are not poor to see and understand how poverty is experienced: “Because of growing class segregation in America, fewer and fewer successful people (and even fewer of our children) have much idea how the other half lives.  So we are less empathetic than we should be to the plight of less privileged kids.” (Our Kids, 2015, pp 229-230)

Maybe it is because our society is so segregated by economics as well as race, and maybe it is partly partly because older Americans remember the post WWII years when white families at least experienced more social mobility, many seem drawn to books like Paul Tough’s How Children Succeed, the 2012 best seller about saving poor black children through character education.  If overcoming structural poverty seems too difficult and too expensive for our society to undertake,  maybe we can help poor children overcome their disadvantages by teaching grit and determination.  Tough quotes the academic research of Angela Duckworth, who developed a grit scale to measure  students’ determination.  The students with more grit did better at the National Spelling Bee and were less likely to drop out of West Point. How Children Succeed is a feel-good book and its theory has served as the justification for a lot of behaviorist charter schools that focus on toughening children up, but it contains no ideas for ameliorating structural poverty and growing inequality.

Mike Rose, the education writer and professor at UCLA’s Graduate School of Education, just posted a new piece on his own blog (and also as a guest post in Valerie Strauss’s column) decrying “grit” as a solution to educational inequality: “One of the many frustrating things about education policy and practice in our country is the continual search for the magic bullet…. One such bullet is the latest incarnation of character education, particularly the enthrallment with ‘grit,’ a buzz word for perseverance and determination… I worry about the limited success of past attempts at character education and the danger in our pendulum-swing society that we will shift our attention from improving subject matter instruction… And I fear that we will sacrifice policies aimed at reducing poverty for interventions to change the way poor people see the world.”

Rose has also read Angela Duckworth’s research, and he gives Duckworth and her colleagues credit for honesty about the qualifications and limitations of their study; they did not oversell their theory:  “The studies are correlational, so do not demonstrate causality… But Duckworth and her colleagues did something that in retrospect was a brilliant marketing strategy, a master stroke of branding—or re-branding.  Rather than calling their construct ‘perseverance’ or ‘persistence,’ they chose to call it ‘grit.’  Can you think of a name that has more resonance in American culture?  The fighter who is all heart.  The hardscrabble survivor.  True Grit.  The Little Train that Could.  Grit exploded.  New York Times commentators, best-selling journalists, the producers of This American Life, Secretary of Education Arne Duncan, educational policy makers and administrators all saw the development of grit as away to improve American education, and more pointedly, to improve the achievement of poor children, who, everyone seemed to assume, lacked grit.”

Rose is certainly not opposed to character traits of discipline and perseverance: “Let me repeat here what I’ve written in every other commentary on grit.   Of course, perseverance is an important characteristic.” He points out, however, that the victims of our latest “grit” fad are the very children who, it is assumed, will be the beneficiaries of programs in character education:  “Regardless of disclaimers, the primary audience for our era’s character education is poor kids.  As I and a host of others have written, a focus on individual characteristics of low-income children can take our attention away from the structural inequalities they face… I realize that what grit advocates want is to help young people better cope with such hardship… But if as a society we are not also working to improve the educational and economic realities these young people face, then we are engaging in a cruel hoax, building aspiration and determination for a world that will not fulfill either.”

Rose concludes: “It is hard to finish what you begin when food and housing are unstable, or when you have three or four teachers in a given year, or when there are few people around who are able to guide and direct you.  It is equally hard to pursue a career with consistency when jobs available to you are low-wage, short-term and vulnerable, and have few if any benefits or protections… Personality psychology by its disciplinary norms concentrates on the individual, but individual traits and qualities, regardless of how they originate and develop, manifest themselves in social and institutional contexts.”  Justice must be systemic; it cannot be achieved one child at a time by schools that emphasize the development of grit.

Stiglitz: Inequality Is Not Inevitable

The NY Times just ended an eighteen month series of commentaries on its opinion pages about economic inequality,  The Great Divide, moderated by the Nobel prize-winning economist, Joseph Stiglitz.  I urge you to read the final column in this series, in which Stiglitz declares, Inequality is Not Inevitable.

That economic inequality matters to educational outcomes in public schools has been conclusively demonstrated in research by Stanford University’s Sean Reardon, who has shown that in America we are increasingly raising our children in schools where all the children are poor or schools where all the children are rich, with fewer economically diverse communities where children from a range of incomes are educated together.  School achievement has come to track this growing residential segregation by economics, with poor children lagging farther behind as wealthy children leap ahead.  Here is a summary of Reardon’s research:

  1. By 2009 the proportion of families in major metropolitan areas living in either very poor or very affluent neighborhoods had increased—to 33 percent (from 15 percent in 1970) and the proportion of families living in middle income neighborhoods had declined to 42 percent in 2009 (from 65 percent in 1970), with increased segregation at both ends of the income distribution.  Both high-and low-income families became increasingly residentially isolated in the 2000s, resulting in greater polarization of neighborhoods by income.
  2. Income segregation has grown significantly over four decades for black and Hispanic families, but particularly in the years since 2000.  While income inequality among black families did not grow significantly in the two most recent decades from 1990 to 2009, residential segregation by income did grow considerably among black families.  “Low-income black and Hispanic families are much more isolated from middle-class black and Hispanic families than are low-income white families from middle- and high-income white families.  The rapid growth of income segregation among black families has exacerbated the clustering of poor black families in neighborhoods with very high poverty rates.  And while middle class black families were less likely to live in neighborhoods with low-income black families, this does not mean that middle-class blacks gained access to middle-class white neighborhoods….”
  3. In another report, Reardon demonstrates that along with growing residential inequality is a simultaneous jump in an income-inequality school achievement gap.  The inequality achievement gap between the children with income in the top ten percent and the children with income in the bottom ten percent, was 30-40 percent wider among children born in 2001 than those born in 1975, and twice as large as the black-white achievement gap.

In his recent column, Joseph Stiglitz challenges those who conclude that “violent extremes of wealth and income are inherent to capitalism.”  Stiglitz points to “a wide range of examples… (that) undermine the notion that there are any truly fundamental laws of capitalism… If it is not the inexorable laws of economics that have led to America’s great divide, what is it?  The straight forward answer: our policies and our politics.”  “So why,” wonders Stiglitz, “has America chosen these inequality-enhancing policies?”  The answer:  “The American political system is overrun by money.  Economic inequality translates into political inequality, and political inequality yields increasing economic inequality.”  The very wealthy design the rules of the game through the role of money and power in politics.

A fascinating companion piece to Stiglitz’s commentary is another column, published on Monday by another Nobel Prize winning economist, Paul Krugman.  Krugman describes the role of the American Legislative Exchange Council (ALEC) whose members draft and distribute model laws across the statehouses in search of legislative sponsors who will tailor the generic models to their own states’ needs. ALEC drafts model laws in a range of policy areas, but Krugman’s focus is ALEC’s ongoing effort to promote state tax cuts.  “And what is ALEC? It’s a secretive group, financed by major corporations, that drafts model legislation for conservative state-level politicians.  Ed Pilkington of The Guardian, who acquired a number of leaked ALEC documents, describes it as ‘almost a dating service between politicians at the state level, local elected politicians, and many of America’s biggest companies.’  And most of ALEC’s efforts are directed, not surprisingly, at privatization, deregulation, and tax cuts for corporations and the wealthy.”  Krugman agrees with Stiglitz: money concentrated in the hands of powerful interests promotes inequality—in the case of Krugman’s example, through tax cuts that further concentrate wealth at the top while denying the public sector tax dollars that might enable government to pay for basic services like public schools or to address the needs of those at the bottom.

Who are the victims according to Stiglitz?  The young—with nearly 25 percent of children living in poverty.  Those imprisoned: America has 5 percent of the world’s population and a quarter of the world’s prisoners.  Those whose homes were foreclosed as the banks were bailed out.  Those who are sick, as 24 states have chosen not to expand Medicaid under the Affordable Care Act, thereby denying coverage to our poorest citizens.

According to Stiglitz: “The problem of inequality is not so much a matter of technical economics. It’s really a problem of practical politics.  Ensuring that those at the top pay their fair share of taxes—ending the special privileges of speculators, corporations and the rich—is both pragmatic and fair… If we spent more on education, health and infrastructure, we would strengthen our economy now and in the future… Widening and deepening inequality is not driven by immutable economic laws, but by laws we have written ourselves.”

The Overlay of Economic Injustice and Race in America

Earlier this week the Nobel Prize winning economist Joseph Stiglitz offered a personal and sober view of American society and the economy fifty years after the March on Washington: “Dr. King realized that the struggle for social justice had to be conceived broadly: it was a battle not just against racial segregation and discrimination, but for greater economic equality and justice for all Americans. It was not for nothing that the march’s organizers, Bayard Rustin and A. Philip Randolph, had called it the March on Washington for Jobs and Freedom.”

Fifty years ago Stiglitz traveled to Washington for the March.  A recent college graduate, he was set to enter a graduate program in economics just a few weeks later.  He writes that the March on Washington and Rev. Dr. Martin Luther King were instrumental in inspiring him to focus his career on economic inequality.

Today, fifty years later, we know that children’s opportunities remain constrained by inequality and continuing racial and economic segregation. Our dilemma is neither merely the failure to have achieved racial justice nor rapidly accelerating economic injustice; the two are overlaid for the mass of black and brown children.  According to Stiglitz, today the median income of black families is 58 percent of the median income of white families, with the median total wealth of whites 20 times that of blacks.  Stiglitz reports that 65 percent of African American children live in low income families, and “The Great Recession of 2007-9 was particularly hard on African-Americans (as it typically is on those at the bottom of the socioeconomic spectrum). They saw their median wealth fall by 53 percent between 2005 and 2009, more than three times that of whites: a record gap.”

Stiglitz summarizes the mass of factors that conspire to undermine educational opportunity.  While an income-inequality achievement gap has now surpassed the racial achievement gap in American public schools, it is important to remember that for a mass of children the gap is one and the same. Today American children of color are too often segregated in all poor public schools.

Only a year before the March on Washington—in 1962, Michael Harrington wrote The Other America, a book that opened America’s eyes at least temporarily to the poverty and inequality our society had chosen not to see.  Harrington’s indictment continues to describe our very separate and unequal society: “There is a familiar America. It is celebrated in speeches and advertised on television and in the magazines. It has the highest mass standard of living the world has ever known… This book is… about the other America. Here are the unskilled workers, the migrant farm workers, the aged, the minorities, and all the others who live in the economic underworld of American life… Now the American city has been transformed. The poor still inhabit the miserable housing in the central area, but they are increasingly isolated from contact with, or sight of, anybody else. Middle-class women coming in from Suburbia on a rare trip may catch the merest glimpse of the other America on the way to an evening at the theater, but their children are segregated in suburban schools.”

I wonder what we choose to see today. Stiglitz’s important piece this week is aimed to help us open our eyes.