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What The Matter With Big Business?

I don't really know how spot on Bill Gates' diagnosis of problems in American high schools is, or how good an idea his proposed solutions are. What's noteworthy about the piece is the general tone and approach. Bill Gates is a major figure in American business. As such, he and his company bear a small portion of the cost of the problems in our school system. Thus, he takes an interest in taking positive steps to improve the situation. What he's not doing is looking for some kind of super-narrow legislative shift designed to specifically help Microsoft with its workforce recruitment and retention needs.

I have the sense that this sort of thing used to be a widespread attitude in corporate America. Obviously, businessmen were always on the lookout for their class interests and for the narrow interests of the company the run. But in the 1950s and '60s business groups also spent a reasonable amount of time worrying about issues of broad national concern that also happen to be issues of concern to corporate America writ large. Progressive concern with creating a healthy, well-educated population is pretty well-aligned with the generic business interest in creating a healthy, well-educated workforce. Business interest in, say, lower taxes used to be tempered by this sort of interest in things that require public expenditures and an interest in not wrecking the general economy through out-of-control budgeting.

Somewhere along the way, this kind of thinking has basically vanished in favor of preoccupation with extremely narrow sorts of concerns. Basically a decision to casually accept the idea that America's health care system will be crappy, its education system will be crappy, its public infrastructure will be crappy, and its budgetary policies will be crappy -- then businesses will hire lobbysist to wring the maximum quantity of special favors out of congress and regulators while not really worrying if the ship is sinking. There's a certain amount of collective action problem stuff lurking behind this, but it really shouldn't be impossible to overcome.

UPDATE: I'm told that John Judis' The Paradox of American Democracy is, in part, about this. People are always telling me I should read it and I guess I should.

March 1, 2005 | Permalink

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Bill Gates discusses some problems and potential solutions with our high schools. Proving yet again why he's my favorite liberal blogger, Matt Yglesias comments: I have the sense that this sort of thing [concern about the quality of our educational... [Read More]

Tracked on Mar 1, 2005 3:09:58 PM

Comments

I have had a hard time trusting the motives of a man that heads a company as completely ruthless and devoid of ethics as Gates does. However, he does seem to have his heart in the right place here. (He's also quite the philanthropist).

That said, Bill Gates track record on prognosticating is pretty bad. The man could not envision a future where people would need more that 640K of memory. He completely missed the Internet revolution, and had to play catch-up. Most of his futurism talk comes off like that to me. I don't think he is a very astute observer of such things. He also has a very narrow set of influences, and only sees the world through his Microsoft lens.

So while I would like to see more business people show this kind of civic awareness, I don't trust that he has things right at all.

Posted by: Timothy Klein | Mar 1, 2005 1:59:16 PM

I don't necessarily disagree, Matt, but I have a hard time accepting such a broad generalization without a shred of evidence, anecdotal or otherwise. What did companies do in the 50s or 60s that was better than what companies (the same ones or comparably-situated ones) do today?

It's an idea that merits some research.

Posted by: george | Mar 1, 2005 2:12:41 PM

Matt, I love it when you make empirical claims with absolutely no data to back them up. It's awesome!

Empirical claim: [I]n the 1950s and '60s business groups also spent a reasonable amount of time worrying about issues of broad national concern that also happen to be issues of concern to corporate America writ large. ...

Somewhere along the way, this kind of thinking has basically vanished in favor of preoccupation with extremely narrow sorts of concerns.

Accompanying Evidence: None

This is fantastic. Are you a recent graduate of the Republican Party School of Data Analysis?

Seriously, I could have your "Reality-Based Community" decoder ring revoked for this sort of shit. Watch yourself, homie.

Posted by: Chuck | Mar 1, 2005 2:17:52 PM

I have the sense that this sort of thing used to be a widespread attitude in corporate America.

Ah, yes: back in the days when sugar was sweeter...

Sorry, son, it never was. Business was never socially responsible and thieves were never honorable.

Posted by: abb1 | Mar 1, 2005 2:18:15 PM

The trend toward short-sightedness on the part of the major corporate players which you allude to with respect to concern for defunding of public education, is something which I also feel will eventually run its course as the need to right the ship becomes sufficiently desperate. The concern is always whether we will have taken on too much water by then. I allude to the same trend with respect to the continued clamoring for deregulation, which has long since past the point that there must be many in the corporate boardrooms privately worried that they are being pushed much further than they are comfortable toward ethically questionable behaviors, which also undermine long-term profitability.

Posted by: Walker Willingham | Mar 1, 2005 2:20:31 PM

What has happened is that business has won the power balance shift, at least for now. Again. Unions aren't a check. Environmental groups aren't a check. The government isn't a check, it's part of the arrangement now. When votes are determined as a result from a dollar-based formula, the winner is the one with the most bucks.

BTW, Unions and Environmental Groups? They exist because of the previous business excesses.

Posted by: PSoTD | Mar 1, 2005 2:23:13 PM

"Business was never socially responsible and thieves were never honorable."

Nah, Matt is correct. Business at one time was massively paternalistic(Pullman and Ford built their own little cities and tried to keep workers from drinking too much and monitoring their church attendance). During the union era of the 40-60s, there were a lot of small 1-3 factory towns, where management cooperated with the union on bowling leagues etc to create stable productive communities.

Posted by: bob mcmanus | Mar 1, 2005 2:25:16 PM

Companies in the past were more locally rooted & had less next quarter bottom line pressure. Also, the competition was usually based in the same area; this changed as companies started to move south. With this change, the company in the high tax, unionized area was at a real disadvantage. In the last thirty years, the rules have changed- if a firm didn't compete in the race to the bottom, didn't show a competitive bottom line; the capital needed to stay in business would be taken away.

Posted by: EVS | Mar 1, 2005 2:26:01 PM

> Progressive concern with creating a healthy,
> well-educated population is pretty well-aligned with the
> generic business interest in creating a healthy,
> well-educated workforce

Well, I would start by considering whether today business can get by with a few CxOs at the top pulling in $50 million/year, a few hundred technical specialists in the middle - pay 'em $100,000/year, then laugh when you lay them off at age 45 - and a few thousand drones at $10,000/year in the US or $500/year in China. No need at all for an educated middle class of Citizens; in fact that is a detriment. Citizens might not sit passively in their seats watching American Idol between runs to Wal-Mart to buy on credit.

Cranky

Posted by: Cranky Observer | Mar 1, 2005 2:26:29 PM

I think that Matt was right in general about the past. deregulation, deunionization, and new management practices have reduced corporate citizenship. Any free marketer will tell you that that's a good thing.

However, Gates is a cutthroat businessman first and last. Here in Oregon a geek dad helped convert his kid's school to Linux, thus saving half a FTE of tech support. Steps were being taken to go statewide, but legal authorization was required and Gates' people stepped in and lobbied the odious Karen Minnis (RW Christian Speaker of the Oregon House) to kill the bill.

Posted by: John Emerson | Mar 1, 2005 2:36:34 PM

Gates' suggestions are absolutely right and not as meaningless as they might seem. In the 1990s it was considered good to have direct corporate involvement in schools. Jonathan Kozol rails at the view that low income children need to be prepared overtly for work through bullshit education; rather, preparing them for work means rigorous academics. If that's more expensive to provide and if corporate sickos are less willing to pony up (misguidedly), then so be it--society should fund a good high school education for everyone. And that absolutely starts with a demanding curriculum, as Gates says.

Posted by: Marshall | Mar 1, 2005 2:44:52 PM

But if that was a result of regulation and unionization, why should business get credit? Business can do one thing only - maximize profits.

Posted by: abb1 | Mar 1, 2005 2:49:26 PM

What surprised me about Gates' thesis, is that he never once mentioned the lack of funding as a reason for the decline of public schools. He only mentioned that schools have not "re-designed" their curriculum to meet modern needs.

This is surprising. I assumed Gates would go on and on about how schools need to spend more on technology (which Microsoft would provide).

The best path to innovative re-design would be to introduce competing curricula and empirically determine which ones work best. Gates notes examples of this in his article - schools that tried something different and found it worked.

I don't think throwing more money at the problem is what Gates is suggesting. I think he's suggesting trying to do something different with the money we're spending. He is also suggesting more accountability and asking more of the students.

Posted by: chief | Mar 1, 2005 2:54:27 PM

It would be too obvious if Gates suggested schools need to buy more computers directly. Instead, they need to upgrade to the 21st century -- which incidentally will probably involve lots of Microsoft products.

Posted by: Matt G. | Mar 1, 2005 2:59:56 PM

I didn't mean to say that we should increase funding to education--I hope that's not the message I sent. In fact, the preponderance of research shows zero connection between spending and outcomes.

What I meant to say is that we should change the curriculum and more importantly, the expectations. Whether or not that costs more, whether or not it pisses off corporate sponsors who have long talked about how low-income students are their "future entry level workers," not their future doctors and lawyers to use Kozol's formulation, it should be done.

Posted by: Marshall | Mar 1, 2005 3:02:26 PM

I think our education suffers from the opposite problem. Not everyone is going to be a genetecist/geologist, yet our educational system seems to think so. (And, unfortunately, our parents.) Whatever happened to carpenters? I really don't think everyone's cut out for college. Germany has the right idea.

Posted by: scarshapedstar | Mar 1, 2005 3:20:55 PM

"Progressive concern with creating a healthy, well-educated population is pretty well-aligned with the generic business interest in creating a healthy, well-educated workforce."

I see no evidence that businesses in this country want that. Certainly a company like Wal-Mart, our largest employer, doesn't give a crap about a healthy workforce; all they need to be able to do is fire sick people and replace them. They also don't have any reason to want a well-educated workforce, because well-educated people ask questions, cause problems, think about joining unions, etc. If you're smart enough to stack boxes and not complain when you're putting in off-the-clock overtime, that's all the smarter they need or want you to be.

Posted by: Ted | Mar 1, 2005 3:26:28 PM

Matt is quite correct in saying

"I have the sense that this sort of thing used to be a widespread attitude in corporate America. Obviously, businessmen were always on the lookout for their class interests and for the narrow interests of the company the run. But in the 1950s and '60s business groups also spent a reasonable amount of time worrying about issues of broad national concern that also happen to be issues of concern to corporate America writ large. "

See any of Sanford Jacoby's work, particularly Modern Manors and Employing Bureaucracy. Also: Barley and Kunda "Design and devotion: the ebb and flow of normative ideologies of control in managerial discourse" in Administrative Science Quarterly (37:363-399) or Shenhav's "From Chaos to Systems: The Engineering Foundations of Organization Theory." in Administrative Science Quarterlu (40:557-585) or Clark Davis' Company Men.

Posted by: burritoboy | Mar 1, 2005 3:26:41 PM

Matthew:

You need to get over to evergreeen politics blog for the real story on Microsoft and education. The hypocrisy is breathtaking:

http://www.evergreenpolitics.com/ep/

Couple points from that blog, namely that Microsoft has the educational system that they helped create:

* Directed by Gates, Microsoft has chosen to avoid paying approximately $55 million per year in state taxes by operating its licensing business in Nevada. The legislature lowered the tax rate for software licensing by 2/3 at the behest of the software industry (Microsoft) in 1998. If not for this, Microsoft's effective tax dodge would be $165 million per year. And of course their savings grows each year as their business grows.

* Directed by Gates, Microsoft lobbied successfully to renew Washington state's R & D tax credit program. Microsoft saves approximately $20 million per year from this program.

* This money reduces the funds in the state's general fund which pays for education.

* In the meantime, Microsoft funded last year's initiative 884 which proposed taxing lower income people to pay for education via a sales tax.

* The Seattle Times has a story today about how the city arranged a land sale to the Gates Foundation without even offering it up for bids or appraisal.

Posted by: Kent | Mar 1, 2005 3:28:22 PM

"the preponderance of research shows zero connection between spending and outcomes."

uh. i haven't looked into this in depth, but it was my understanding that there was a big connection between spending and outcomes. and it's unfortunate that Gates said nothing about equal and adequate funding as a start in fixing our schools.

since schools get a large chunk of their money from regressive local property taxes, more affluent areas (like say where I grew up in Montgomery County, Maryland) have better schools where most everybody goes to college afterwards. while poorer rural and urban areas not only don't have enough funding (e.g. the dilapidated buildings of DC public schools) but they would have to have a higher taxrate (on the poorer folks) to raise adequate funding. cuts in federal spending obviously make this worse. is this just a myth?

Posted by: Phil | Mar 1, 2005 3:29:20 PM

And that absolutely starts with a demanding curriculum, as Gates says.

But it doesn't end there. Throwing tough curricula at low learning students doesn't fix the problem. Its been tried, and its failed. Usually the teachers get blamed. In my experience with a low-income city school system, there are good teachers and there are bad teachers. But just about all of them are afraid to speak up for fear of losing their jobs. That is not the way to find out what works.

We need to do more than just shrink class size. We need to put two teachers in one room (teacher and assistant) and have assistants that actually know the ciricullium instead of the teachers having to teach the assistants. If that means higher paid assistants , than so be it.

the preponderance of research shows zero connection between spending and outcomes.

The caveat I would add to that is to focus on what that spending is used for. If its just extra computers or media presentations, or even fancy books, I would agree. But spending also means personnel. I'm not talking about wages, as teachers, especially tenured ones, tend to do pretty well. But more bodies in the classroom translates to higher learning, especially in troubled districts where discipline (read: babysitting) becomes their primary task and teaching is secondary.

Posted by: Adrock | Mar 1, 2005 3:31:35 PM

As to Gates' suggestions, I wonder why Americans always have to invent everything here. If our educational is lagging, why not just simply imitate what works elsewhere? I don't see why we shouldn't just adopt the German or French system wholesale, top to bottom, with minimal change (obviously, the emphasis on German or French history, literature and politics would be changed to an equivalent emphasis on American history, literature and politics). After that, we can see what other tweaks we'll need to make.

The first step should be to make schools academic institutions, not schools + football training + social centers + random-ass horseshit. Your school should be a place of intense and disciplined study, not someplace where people are throwing balls around.

Posted by: burritoboy | Mar 1, 2005 3:35:05 PM

it was my understanding that there was a big connection between spending and outcomes.

He may have been talking about wasted money. In the recent system I mentioned above, there are 4 computers in each room. But noone uses them, because they don't know how and, (you'll love this) there is NO IT personnel for the building! Thats right, in this city, with about 6-8 elementary schools and one high school, there is a centralized help desk, but no people that are able to help "on demand."

That is basically wasted money right there. (Of course, adding an IT system to each school might then realize the benefits, but I digress.)

There is also bureacratic waste. Everyone has their position and doesn't want to give it up. The superintendent makes 160K and has an SUV subsidized by the town. He's also useless.

Posted by: Adrock | Mar 1, 2005 3:36:23 PM

why not just simply imitate what works elsewhere?

Conservatives in government, thats why. Plus, there are companies they sell their "program of the year" to any suspecting school system. They come in and sell this to the system and the system adopts it. But it takes many years for advantages to be seen. And what if nothing improves? Wasted money, thats what.

Posted by: Adrock | Mar 1, 2005 3:40:45 PM

I have the sense that this sort of thing used to be a widespread attitude in corporate America. Obviously, businessmen were always on the lookout for their class interests and for the narrow interests of the company the run. But in the 1950s and '60s business groups also spent a reasonable amount of time worrying about issues of broad national concern that also happen to be issues of concern to corporate America writ large.

Same was true in many other cases. For example, labor unions used to be interested in national defense issues during the Cold War. Obviously, that's not the case anymore.

Posted by: Al | Mar 1, 2005 3:47:09 PM

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