More Crony Capitalism at Reason

Kevin Carson

Note: With a few changes of names, this applies well to our own experiment with academies. SIG

More Crony Capitalism at Reason

At Reason, Nick Gillespie (“The Scandal of K-12 Education — and How to Fix It,” June 5) points to the sorry state of education and — once again — proposes charter schools as the solution. The amazing thing is that the repeated right-libertarian shilling for charter schools — at Reason and elsewhere — comes from the same sort of people who periodically mae noises about opposing “crony capitalism.”

I’ve become convinced that “crony capitalism,” in right-libertarian parlance, is utterly devoid of meaning. It’s just the equivalent of an animal grunt for signalling membership in the same herd. How else can we explain the fact that the folks at Reason regularly denounce “crony capitalism” — and then turn around and endorse one form of real-world crony capitalism after another?

Reason denounces “crony capitalism” — and then between denunciations does things like:

*endorse corporate-owned “charter cities,” built on expropriated peasant land, in collusion with a military dictatorship established by a U.S.-backed coup;

*endorse the “emergency manager” regimes in Detroit and other major cities in Michigan; and, as we see here

*endorse charter schools, which are a textbook case of crony capitalism. If Reason writers lived in the Detroit of Robocop, they’d be enthusiastically celebrating Omni Consumer Products.

If the Export-Import Bank didn’t exist, right-libertarians would’ve had to invent it just to have some token example of “crony capitalism” that they actually oppose.

Charter schools may not be “private,” as Gillespie argues. That is, the public school system’s brick-and-mortar physical plant may not actually be sold off to private charter companies. But they’re often contractually managed by private, for-profit chains that specialize in running charter schools. And the public sector contracting with private sector entities to carry out monopoly public functions with taxpayer money is what “crony capitalism” is all about.

And if charter schools are such godsends to underserved minority communities, as Gillespie claims, why is charterization almost universally implemented through back-room politics that circumvents the democratic process? The two most prominent examples of large-scale charterization in the United States are in New Orleans (by a government that took advantage of the political vacuum after Katrina to push citywide charterization — along with the ethnic cleansing and demolition of many historic black neighborhoods), and by unelected emergency managers in Detroit. In my own state of Arkansas, charterization of the Little Rock public school system is promoted, not by local community activists petitioning the school board, but by the Walton Foundation skulking around like thieves under cover of darkness.

Charterization is a form of disaster capitalism promoted by corrupt states in collusion with business interests, taking advantage of public helplessness to railroad through crony capitalist measures of all kinds. We’ve seen it in Pinochet’s Chile, Yeltsin’s Russia, Iraq under Bremer’s Coalition Provisional Authority, as well as New Orleans and Detroit.

The only form of public accountability charter schools have is the power of exit that Gillespie mentions — the public may eschew charter schools that provide inadequate education. That is, if the whole school system isn’t administered by the same charter management company.

City-wide school districts and school boards were a “good government reform” instituted at the turn of the 20th century because so-called “Progressives” wanted to reduce the involvement of ordinary working people in running school systems. In particular, they wanted to shift as many issues as possible to unelected “professional” administrators and change the composition of school boards from ordinary workers and small shopkeepers to white collar types.

If the goal is really accountability, instead of making the schools even more indirectly accountable to the public — which is what charterization does — why not make public control even more direct? Why not abolish city-wide school boards and restore the kinds of neighborhood school boards that existed before the “Progressive reforms”? Or better yet, why not turn each school into a stakeholder cooperative directly managed by the parents and teachers themselves?

Libertarians are supposed to believe in Hayek and distributed knowledge (the idea that those closest to a situation are best qualified to deal with it), right?

Not to mention that many charter schools engage in pedagogical approaches that should make decent libertarians cringe — draconian rules that micromanage behavior to the point of punishing students for not making eye contact — and an authoritarian, one-dimensional approach to imparting knowledge. Ivan Illich and Paulo Freire would spin in their graves.

The solution to government education’s ills is less statism and bureaucracy, not more. The solution is not to insert a layer of nominally “private” management bureaucracy, in collusion with a school district bureaucracy that’s unaccountable to the public. The solution is to remove the existing layers of bureaucracy and mutualize the schools under the direct control of the people they serve and the people doing the job.


  1. If you’re looking at Reason for consistent right-libertarian positions, you’re looking at the wrong place. It is very much a globalist, libertarian-lite thinktank that paleolibertarians have long held in disrepute.

  2. I’ve long thought that the one thing worse than the government spending our money is the government giving it to notionally private (or “charitable”) entities to spend. It results in even less taxpayer influence (marginal as that is) while not introducing anything recognisable as market forces.

  3. IanB,

    Good point.

    Fake “privatization” — in which the state maintains overall control of, and theoretical responsibility for some function, but farms that function out to putatively “private” enterprises in this way or that — does indeed reduce taxpayer influence. When that function is performed badly, the politicians/bureaucrats and the “private” enterprises can just endlessly pass the blame back and forth instead of there being specific elected people who could theoretically be held accountable on election day.

    Additionally, this kind of fake “privatization” infects putatively “private” enterprises with the same regulatory burdens and bureaucratic scleroses that afflict “public” institutions. Sure, vouchers and tax credits for use at “private” schools, or having “private” companies run “public” charter schools, sounds great. But as soon as the taxpayer money lands on those “private” enterprises, so do the demands that they start acting as if they were “public” enterprises vis a vis hiring practices, non-discrimination in delivery of services, etc.

    • I agree. This form of “privatisation” actually doesn’t privatise anything (as we would understand the concept of “private”). Instead, it actually extends the State further into the private sphere. Genuine privatisation would be a withdrawal of the State from some function or area. It never (or hardly ever, I cannot think of an actual example) does this.

      The only meaningful purpose in this regard to me for Libertarians is not to change how the State does what it does, but to dismantle it. Whether or not the State can be entirely (anarchist) or only mostly (minarchist) dismantled is a matter of opinion. But to me the reduction of the State is not about it spending less money (though that is a nice side effect) but in forcing it to withdraw altogether from some area; legally, economically and in terms of responsibility and authority. Faux privatisation is never achieved to arrange that goal.

      • The Heath Government privatised Thomas Cook. Since then, HMG has taken no special interest in package holidays.

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