A short lesson in how business models do not apply in public education

Council member Jason Holleman pulled me in on Sunday when he quoted one of the finest expositors of the relationship between public education and democracy, John Dewey, in his Tennessean column. Dewey's may be a hard pill to swallow for the "collaborative culture" in Nashville, which eschews conflict usually by ignoring those who bring it to light. However, it is no less true in genteel Music City: conflict is the gadfly of the critical reflection necessary to growth. Both minimizing and denying conflict, instead of acknowledging it and working towards mutual understanding, instigate nothing. Instead, they lead to hubris, atrophy and neglect as they destroy authentic community.

But I could go on and on about kick-ass Dewey quotes to the point of diversion.

The really important statements by CM Holleman are:

Speaking out is an essential responsibility of democratic leaders. To describe such leadership as “freelancing,” reflects a misunderstanding of the role of elected officials. We work for the people who’ve elected us. If we limit that work to the minutes of official meetings, we abdicate a critical responsibility to protect the public interest.

The Chamber of Commerce’s recent Report Card critiqued such advocacy as being inconsistent with the policy governance model the Board adopted. Respectfully, the Chamber may need a reminder on the nature of democracy and the expectations of elected officials.

Expecting only public praise and private criticism in the name of “policy governance” undermines the essential protections of free speech in general and, more specifically, erodes the relationship between constituents and their elected officials.

CM Holleman is responding to the Chamber's education committee, which accused the Metro Nashville Public School Board of "freelancing" instead of acquiescing to an idea of "unity" contrived from the strictures of their own business models for fixing what they deem as "dysfunction." The fallacy is the unexamined assumption that everything is better if operating like a business ideal. Commentators of many stripes have pointed out that all kinds of societal projects would break apart under the weight of corporate logic.

Here is the specific critique in the Chamber's "report card" to which CM Holleman's op-ed is responding:

Over the past year, it is clear that the Metro school board has struggled to articulate a common vision for the school system. This may be due, in part, to significant turnover on the board. As of August 2014, five of the nine members had served fewer than two years. Even more disruptively, some board members routinely criticize their director of schools through social media and news media articles between official board meetings, creating a perception of dysfunction and lack of leadership. Given these dynamics, we believe the board would be wise to invest more time and resources toward becoming a more cohesive governing body. We recommend that the school board recommit its adherence to policy governance by engaging in ongoing professional development. Engaging an outside trainer on a regular basis to work with the board on updating its policy governance model would ensure all members, regardless of length of tenure, have a thorough understanding of the model. In addition, these ongoing sessions could be designed to help the board accomplish necessary tasks, such as coming to consensus on expectations for their next director of schools.

Before we consider the merits the report card's argument, keep this mind: the Chamber of Commerce is a powerful lobby group that exerts pressure on local government to address their special interests. Methods they have used to collect data used to exert influence in the past were overseen by public relations and marketing firms, not independent researchers. The report itself is funded by sponsors and corporate partners listed on page 2. Whatever detached objectivity the Chamber may claim for its data now has to be qualified by its subjective use of money and power supplying and potentially biasing report results.

Such funding mechanisms for lobbying remind me of how public-private partnerships produce economic impact studies that are generally more reliable for influencing opinions than for discerning the truth.

Now to the merits of the arguments. It is frankly hypocritical for a business group to criticize a government body for a high turnover rate when the former has been shaken by unstable economies. Nashville has been beset by layoffs in recent years at some of the region's largest employers. Many here have witnessed laid off employees asked to leave immediately and escorted out by security guards. What kind of hits are long-term institutional knowledge taking in the private sector right now? Are local corporations not now hiring temporary workers and contracting out projects so that they avoid paying benefits and payroll taxes on full-time employees? Are businesses setting examples of low turnover rates in the first place?

On on that point, the education committee's choice to lob darts with terms like "freelancing" and "disruptively" so pejoratively at dissenting school board members is interesting, given trendy "disruptive innovation" and the hard-core realities of the economic system. The "sharing economy" in vogue now emphasizes "freelance" or contingent workforce, which could be the norm in a few years. So, is freelancing bad or good? One of the co-chairs of he education committee, Jackson Miller (who himself takes to social media to debate privatization of public education), has a background in the tech sector, which has "an appetite for disruptive ideas." So, is "disruption" bad or good?

The Chamber of Commerce's harsher judgments are based on ideas that are not even enduringly real in its own limited world. To speak so unambiguously, so moralistically to public education leaders is disingenuous. And frankly, the Chamber engages annually in its own pet projects (witness charter schools and corporately sponsored "academies") that disrupt and freelance in public education. Pot meet kettle.

But more to CM Holleman's point, the report card reflects an unabashed bias to take the power away from parents, teachers, principals, and voters and leave it to the whims of special interest groups and hired consultants (who stand to economically benefit from the report card's recommendation). Business lobby groups should be one among many voices with influence over the school board. PTOs, neighborhood groups, and community-based organizations, even if they do not have a lock on wealth approaching that of the Chamber, should have equal influence.

However, inviting more stakeholders leads to more dissent and the actual messiness of democracy. As if we have any other legitimate choice. To insist a democratically obligated board should subscribe to some cleanly-projected, top-down, squabble-free, market-based ideal that rarely even exists in the marketplace is partial, unreasonable and plain foolish.

In the spirit of Dewey, public education is supposed to develop children into critically thinking participants in a robust democracy that encompasses dissent as well as obedience. We do Nashville's children a disservice if we pretend--even on their behalf--that democracy is uncomplicated by dissent. What may seem like a good business model (dependence, docility, submissiveness, etc) is not always a good education model.

Press the Accelerator: is turning Metro employees into entrepreneurs a good idea?

The business of business has nothing to do with "addressing inequality". The business of business is to maximize profits, even if it means supporting or generating inequality. In the 1950s, businesses had to be forced to acknowledge the civil rights of African Americans. It was not a benevolent free market that incorporated respect for human rights. It was a combination of government coercion and popular and political movements that forced businesses to comply.

As I learn that Mayor Karl Dean through his Office of Innovation is "innovating" Metro employees to become entrepreneurial by means of a "City Accelerator", I am concerned, not excited:

Through the Entrepreneur Center, we help really smart Metro employees learn about these tools, and turn them into quasi-entrepreneurs ... inside of Metro government so that they can make their ideas real businesses and real solutions for our city .... During the accelerator two more cohorts of innovation fellows will create new innovations for Metro government

The problem with this is it sounds exactly like the Republicans' decades old saw that "government should be run like a business," which has been tried and failed so many times in recent history. Disruption and innovation are the latest fad jargon for what is going on in the tech industry, which moves like gang busters in Nashville. But when stripped of the hype, the ideas amount to warmed-over conservative shut-down of public goods guaranteed by a democratically elected government.

Innovators invariably look for a different set of rules outside of government regulations by which to be "free" and to operate on their own. Then again, so do many Republicans.

Entrepreneurs by definition are people who risk their own money in order to start a business or profit-making enterprise. (Never mind that Nashville's Entrepreneur Center is heavily subsidized). Governments in democracies focus on providing access to broadly shared goods, like clean water, public safety, preserved undeveloped green space, transportation options and right to assembly. At times those purposes are complimentary, at times they are not.

For example, privatizing public education invests venture capital dollars heavily subsidized by the Obama Administration so that investors can experience a return in the education marketplace while selecting and keeping the students the corporations want rather than providing equal education opportunities for every student (the very purpose of the idea of government-provided education). Regardless of student development and welfare the bottom line is to avoid risk and maximize financial benefits.

A problem with turning government workers into entrepreneurs is that they will logically act to maximize profit-making enterprise regardless of whether it meets the test of universal accessibility. When they come up against regulations, even ones designed to protect consumers from an indifferent and arbitrary marketplace, they might look for ways around them (as if savvy government bureaucrats have never done that before).

Worse than trying to do something more disruptive than the regs allow is insisting, as Director of Financial Empowerment Erik Cole does in the video, that innovation can work "within the context of poverty" to solve inequality. Look at companies with reputation for greatest innovation before you buy his logic. Two start-up ride-sharing companies--attempting to disrupt cab companies and the government rules that regulate them--do not seem to be doing much to end inequality in our lifetime (are they even disrupting it?)

But it can be too easy to forget that people make “instant” happen. And, generally, these people are not a traditionally stable workforce. They are instead a flexible and scalable network of workers — “fractional employees” — that tap in and tap out as needed, and as suits them.

It’s estimated that more than 100,000 of these jobs have been created, especially due to the largest on-demand mobile services: The ride-sharing companies Uber and Lyft, whose drivers provide alternatives to taxis and other forms of transportation.

The Uber-style model works when a company can turn that kind of disparate workforce into a reliable branded service. It’s not quantum computing, but after you click “buy now,” it falls to someone to do the hard and sensitive work of moving physical stuff around in the real world.

Uber says it is creating 20,000 U.S. jobs per month by allowing drivers to tap into its ride-hailing service in their local cities by renting a phone from the company (it used to be free).

And so, at its core, you might think of the instant gratification economy as a story about jobs — new kinds of jobs. Here’s how it works: People like to get stuff when they want it. And, because of smartphones and smart logistics software, deliveries can happen much more cheaply and quickly, especially in cities.

So, the availability of on-demand services generates more demand. To meet it, companies bring on more workers. And ultimately, finding one of these jobs — or often, more than one of them — can create living wages for people who might otherwise be out of work.

But it’s not all shiny happy job creation. It’s not terribly uplifting to think that the future of labor is delivering stuff to rich people.

That does not sound promising at all for low wage workers and homeless people. The expectation is not that workers achieve stability in the fluid "sharing economy" (or is that "service economy"?). The inflexible mantra is "stay flexible and scalable".  The goals of democratic government and the sharing economy work at cross purposes if the goals are equality, social justice and labor stability. If a few people actually achieve a living wage, it will like charter schools offering a way out of poverty to college for a small number of high school students, while the charter school corporations get rich.

I do not have a problem with innovating in government. One of the biggest innovators in U.S. history was Franklin Roosevelt's New Deal. I do have a problem with dismantling government programs and precautionary regulations under the banner of absolute freedom for private enterprise, especially the absolute freedom to evangelize government workers and turn them into drones who support business innovators more than they advocate for ordinary Nashvillians.


UPDATE: Beyond how business innovation actually changes income inequality is the specific question of Karl Dean's practices dealing with homelessness before the City Accelerator was a prospect. Last year, local pastor Jay Voorhees observed that the Mayor's Office has a poor track record on helping the homeless:

...outside of some basic lip service, Mayor Dean has not seemed particularly interested in the social safety net side of governmental services, and certainly not the challenges of the homeless community. In the days after the 2010 floods the mayor’s office was noticeably missing in trying to address the needs of the former tent city residents, leaving the question of how to deal with this population to a set of dedicated volunteers and clergy. The Metro Homelessness Commission has languished during the Dean administration, some of which can be attributed to its members, but part of which is reflective of a mayor who is more concerned with creating new business opportunities than assisting those who are down and out.

It is worth noting that Erik Cole, who appears in the video and makes comments supporting the use of business-oriented innovations to help the homeless, was appointed by Mayor Dean to chair the Metro Homelessness Commission (2008-2012). As council member, Mr. Cole always voted with the Mayor when it came down to spending that favored business interests.

Neither the Office of Innovation nor the Mr. Cole's Office of Financial Empowerment look like improvements on Karl Dean's general disinterest in policies of social uplift. It is hard for me to believe as the video claims that the Mayor has actually lost sleep over the problem of income equality given his past lip service without tangible actions. We cannot expect the City Accelerator to do anything more than help the involved business interests and the Entrepreneur Center.


UPDATE: mayoral candidate Megan Barry loves her some disruptive innovation. Her supportive comment on Nashville's bid on the city accelerator website:

Like Erik Cole, Council Member Megan Barry never bucked Karl Dean on policies that served business interests first. Her campaign for mayor seems to angle now towards a kinder and gentler mock-up of Karl Dean. She may actually lose sleep over income inequality. However, her campaign for council once promised to be a voice for everyone in Metro government and we see how that populist tone failed to materialize in real policy. I doubt a Mayor Barry would do much beyond lip service to the intention of leaving no one behind. I have never witnessed her hard-nosed enough to challenge the powers that be that leave people behind in the first place.

In Tennessee, innovation and corruption seem to go hand-in-hand

Recent visits from two notable figures, AOL co-founder Steve Case and Salon writer David Sirota, rendered two different takes on how we spend our money in Tennessee. Mr. Sirota cited a study that indicates that the Volunteer State is one of the more politically corrupt due to how it spends most of its revenues: on construction and police protection instead of on education, health, and welfare. The writer also mentioned Nashville's penchant for throwing our tax revenues at private corporations, which don't appear to find our city itself enough of a lure to decline to payola to stay put:

“Cities and counties in states with troubled political cultures demonstrate the greatest willingness to offer business development incentives.” And again, comparing Tennessee’s corruption with its economic development policies seems to confirm this.

According to the watchdog group Good Jobs First, Tennessee is at the top of the list of states offering so-called “megadeal” subsidies to corporations. Likewise, the Nashville City Paper reports that in the name of economic development, the city has been dramatically increasing its subsidies to corporations, including a $65 million outlay for a minor league baseball stadium.

During last December's ballpark debate when suggestions were made that Metro lessen the moral hazard of handing Nashville Sounds owners our revenues by making them more obligated for spending the money responsibly, the Mayor's minions on the Metro Council called it a "poison pill" that would kill the deal. I would add such false provocation to Mr. Sirota's list of indicators of political corruption in Tennessee.

The city's legislative branch expressed shaky ethics in defending Mayor Karl Dean (who has turned private subsidies into an art form) with its outrageous slurs about entirely reasonable requests concerning how public money is spent.

One council member defended the ballpark funding scheme by insinuating that she might retaliate in any future projects in other districts:

Erica Gilmore

If you think about the way I have supported you in the past, your different projects so that your particular districts can thrive and survive. And I think I've been good at doing that. So, I ask that you would support my district tonight, my community, not just for me but for Nashville. We have to make sure things are equal. We have to make sure all communities work, and before I have never stood up on big projects and talked about fiduciary responsibility, taxpayers money. We just trusted it in the past and now we have a question with it.

It is the height of councilmanic privilege to hold future votes over the heads of other CMs in order to push through a ballpark plan despite questions on how public money will be spent. It must have worked, because she did it again last February regarding a different proposal in her district:

Please know that in order for us to work together you have to support me, because if you bring something for your constituents you expect me to support you and you can't support me I can't do it as well.

For his part Mayor Karl Dean acts like it a badge of honor that Metro is making no money off the lucrative ballpark naming deal with First Tennessee Bank and that the only big ticket item Sounds owners are paying for without government assistance is the guitar-shaped scoreboard. No wonder that Hizzoner wanted to push it through with as little public input as possible; Nashville ends up on the short end of the financial stick at almost every point.

Mr. Sirota is on to something in our state. His observations also provide the political backdrop for Steve Case's visit and comments about Nashville's startup businesses. Discussions about startups in Nashville seem to occur in echo chambers at the expense of evidence that the startup industry is contracting. So, Mr. Case's appearance may be an attempt to shore things up.

The Nashville Business Journal reported:

Looking forward, Case said, that entrepreneurial spirit will be needed to continue growing, competing globally and creating jobs.

“If we’re going to create jobs, we have to back our startups,” Case said.

And those startups can’t just be emerging from Silicon Valley, he added. As technology enters its “third wave” and focuses on integrating the Internet into myriad processes – health care, transportation, etc. – other regions of the country with experience in those sectors should emerge as leaders.

For Nashville, Case said, that will mean seizing the opportunity to remain the biggest innovator in the world of health care.

NBJ did not elaborate on what Mr. Case meant by "we have to back our startups". What that has meant in Nashville under Mayor Dean is kicking in corporate welfare for private businesses, even as public services suffer under his budget knife.

I worry about Mr. Case's exhortation to fund disruptive innovation in health care. Tennessee already flirts with corruption in that it spends less public revenue on access to health care than on subsidizing private business. Encouraging technological expansion in health care is not the same as investing public dollars to expand broader access. Dumping money unregulated into the health care industry simply translates to writing executives blank checks to do anything they want. Startup businesses are not beholden to anyone but themselves and the corporations to whom they may or may not eventually sell out to.

Unchecked innovation will only encourage more corruption in Tennessee regardless of how redundantly stylish it has become for techies to claim they "make the world a better place".

Mr. Sirota deftly rebuffed claims that on-the-dole innovation leads to greater economic development:

Do those subsidies result in job-creating technology and innovation hubs? While many locales ramping up their subsidies certainly hope so, the jury is still out — and that’s being generous. Indeed, there’s plenty of evidence that subsidies do not create the economic development their boosters promise, and instead they merely cannibalize already-existing economies. Meanwhile, a lot of those subsidies end up being awarded to politically connected firms, calling into question whether they are really designed with any kind of coherent economic development plan in mind.

So, the growth that happens here is not caused by the disruptions prompted by government redistribution. The growth would have happened somewhere. All the corporate subsidies do is favor some industries over others and cement political influence and cronyism.

A paycheck

One more note of irony to close this out: Mr. Case's visit was hosted by Nashville's Entrepreneur Center, which is housed in the refurbished Trolley Barns on Rolling Mill Hill. Those Trolley Barns are publicly owned (by MDHA, which bought the property for $10 from the county in 2006). The barns were built as part of the Works Progress Administration, the largest New Deal program that pulled our country out of the Great Depression, not by privatizing and outsourcing the work, but by the government directly hiring and paying people to build. Whenever governments promote job creation nowadays, they come across as a faint shadow of the bold New Deal. Likewise, Mr. Case's chatter about startups providing jobs is a negligible projection of what the government could actually do free from the networks of crony capitalism that fund so many political campaigns.

The political corruption that we see rampant in Tennessee and in Nashville with the giveaways is neither necessary nor inevitable, but until there is tectonic shift in political culture here, the corruption will continue.