So who makes the most profit off of American education?

Published online 17 February 2015.

Well, back in ’04 there was the Big Four:

Three companies have traditionally dominated the market for developing tests: Harcourt Educational Measurement, CTB McGraw-Hill, and Riverside Publishing. All are part of larger conglomerates, and their financial data generally are not reported separately from the controlling corporation.A fourth, little-known company, Pearson Educational Measurement out of Iowa City, Iowa, has significantly increased its market share in recent years. According to the Dec. 1, 2004 Education Week , Pearson has for now overtaken Riverside as the third main testing company.

But as of April 2014 it was reported by Pauline Hawkins in Huffington Post that Pearson had “the controlling interest in (Common Core) and the tests created to test teacher effectiveness.”  And so Pearson is what economic observers of American education are talking about.  The Pearson issue was brought to my attention via Paul L. Thomas, whose most recent piece on Pearson appeared in Alternet yesterday.  Thomas’ piece, in turn, is based upon an earlier piece in Politico by Stephanie Simon (also picked up on Diane Ravitch’s blog and granted a synopsis last week in a Laura Clawson entry), which tells us:

A POLITICO investigation has found that Pearson stands to make tens of millions in taxpayer dollars and cuts in student tuition from deals arranged without competitive bids in states from Florida to Texas. The review also found Pearson’s contracts set forth specific performance targets — but don’t penalize the company when it fails to meet those standards. And in the higher ed realm, the contracts give Pearson extensive access to personal student data, with few constraints on how it is used.

When the politicians talk about bringing in private enterprise to bear upon America’s education systems, what they’re really proposing is what they’ve been doing so far — making enormous giveaways, significantly through no-bid contracts, to big corporations, and especially to Pearson.

So what is it that this “education industry” produces?  Well, textbooks, which might be useful in standardized classrooms in which controlled curricula is peddled to students, but the big profits in the era of NCLB/ RttT are to be made through testing — prep materials, the tests themselves, the grading software, testing experts, and so on.  Here’s your one-stop shopping location in that regard, where you can buy that extra layer of management to facilitate Pearson’s profits.  In sum, what the “education industry” produces is regimentation, advertised through extravagant promises of “college,” “careers,” and “customized learning.”

Back in the 1950s and 1960s there was this term, popular among critics of the capitalist system, to describe the then-current stage of the capitalist system.  The term was “monopoly capitalism.”  Paul Sweezy and Paul Baran, titans of the Monthly Review, even put out a book, Monopoly Capital, to dramatize “monopoly capitalism” further.  Reading about “monopoly capitalism” in this era, however, I’ve come to think that the claim of “monopoly capitalism” was and is an exaggeration.  Capitalism in this era is dominated by oligopolies, not monopolies — and in any industry you can find a few dozen big firms.  Oil, for instance, is characterized by a couple of dozen firms (and maybe a few more) which do the bulk of the business.

In American education, though, the “industry” appears to be moving rapidly toward monopoly capitalism.  CTB McGraw-Hill is, of course, famous for its owning family’s relationship with the Bush administration.  Pearson, though, must be the most formidable of the bunch.  From 2012:

If you haven’t heard of Pearson, perhaps you have heard of one of the publishers they own, like Adobe, Scott Foresman, Penguin, Longman, Wharton, Harcourt, Puffin, Prentice Hall, or Allyn & Bacon (among others).  If you haven’t heard of Pearson, perhaps you have heard of one of their tests, like the National Assessment of Educational Progress, the Stanford Achievement Test, the Millar Analogy Test, or the G.E.D. Or their data systems, like PowerSchool and SASI.

From Alyssa Figueroa on Alternet, back in 2013:

Currently, Pearson has partnered with 18 states in the U.S., as well as Washington, D.C. and Puerto Rico, to produce pricey testing materials. For a five-year contract, Pearson was paid $32 million to produce standardized tests for New York. Its contract in Texas was worth $500 million. Pearson also owns Connections Academy, a company that runs for-profit, virtual charter schools. It also owns the GED program, although competitors have been creating alternatives in order to combat Pearson’s expensive tests.

Apparently Pearson got a head-start upon the current national “reform” bonanza by being a major beneficiary of Texas “reform,” the predecessor to the No Child Left Behind Act.  From a Laura Clawson diary of 2012:

Texas has been at the forefront of the testing craze; in fact, testing was one of the things George W. Bush brought with him from Texas and pushed to a national level, through No Child Left Behind. In 2000, Pearson Education, the company that produces tests for Texas, “signed a $233 million contract to provide tests for Texas schools, and in 2005 they got another $279 million.” In 2011, as Texas was slashing its education budget to the bone, Gov. Rick Perry’s administration gave Pearson a $470 million contract “to come up with a new test that will hold Texas schoolchildren to a higher standard at the same time that budget cuts are forcing them into increasingly crowded classrooms.”

What does Pearson “reform” look like in actual practice?  In a blog posted Sunday, pdxteacher complains about Pearson’s canned curriculum:

The standardized testing (the PARCC and the “Smarter” Balanced) being foisted, by Pearson and others, upon children across the country is equally inaccessible, if not worse.  The tests are designed to fail most students (currently, approximately 30% of students will even “pass” them), and they’re pedagogically unsound, tedious and confusing.  I am horrified that we are heading at a rapid pace towards giving these tests this spring.  I am sickened to think that I will be a party to the unfair, poorly designed testing which my students will be forced to take.

The blog for the movement against Common Core made a list of the “top ten scariest people in education reform.”  #7 was Sir Michael Barber of England, chief education adviser at Pearson.  Barber goes around the world promoting the sort of thing Common Core is in the US.  A Common Core in every nation — what a cash cow that would turn out to be!  Oh, and as for Barber’s methodology, which he calls “Deliverology,” well, there’s this nice book review which explains what sort of bureaucratic nonsense (with chaotic results) Barber is peddling, and then there’s this comment here, eviscerating the core of Deliverology:

I spoke to a very smart fellow-blogger (Mark Johnson) with a cybernetic/systems theory background about deliverology. His response is worth noting in full: 

“Who’s problem does ‘deliverology’ solve? The answer, to me at least, is obvious. It is the politician’s problem. They want to get re-elected. Moreover, they don’t want to think too hard and have a clear ‘position’ on any of the immensely complex issues they have power over  So if they can bluff their way along without upsetting anyone, regularly taking the political temperature, that’ll do nicely.    What’s this means for the rest of us is another issue. Critique and debate is neutralised by process. I suspect only when we become sick of the process itself and the state of our democracy will there be any kind (of) redress.

And so it appears that every economic conquest is ultimately a political conquest.  Make a politician look good, and acquire a contract for a state school system.


So here’s a thought: let’s get sick of the process really quickly.  Educational “reform” has replaced the promise of humanistic education with test-prep, and all for the benefit of Pearson and the rest of the “success” oligopolists.  The American public should arrange a divorce between the US government and big education corporations.  Have the government put out its own textbooks and test-prep materials, and get rid of the Federally-mandated testing regime altogether.  Maybe we’ll end up like Finland or something.  Deprivatize!



Note to education researchers: you can still sign this letter to Congress until February 20th.

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