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Dr. Dan Abbott a.k.a TDAXP, PhD. is one of the oldest of the ZP blogfriends, perhaps one of my earliest readers. At TDAXP, Dan’s highly creative intellect roams widely, and while he delights in playing devil’s advocate and skewering sacred cows, his colorful observations are frequently ingenious. Even when I think Dr. Abbott is wrong, he is moving issues outside their tired, old, boxes and challenging conventional authorities to provide better answers.

On and off, for the past year, Dan and I have been discussing and debating public education and corporate ed reform on several social media platforms, including Twitter. It has been an interesting conversation, partly because conversations with Dan are always stimulating and partly because we draw different normative conclusions while agreeing on most points of fact, second order effects and political dynamics. Twitter’s 140 character limit and Facebook threads sometimes truncate arguments to caricature or one-liners, so recently Dan responded to one of my tweets with a post.

I suggest you read TDAXP, PhD. in full before reading my rebuttal so that you get a fair and coherent impression of his argument:

Monopoly! 

My friend Mark Safranski leads a dual life online, running the fantastic honest-broker site Zenpundit that focuses on military-security issues, and critiquing education reform on twitter from the perspective of a labor activist. Recently on twitter Mark made thefollowing comment [edited to account for twitter’s telegraphic character limit):

There will be no evaluation of test quality, barring a PR disaster. Education publishers are dividing the market – i.e. forming a cartel – not competing.

I think the general principle behind this comment is that any organization in a monopoly position is unconcerned with quality. This viewpoint is generally held, and wrong.

Monopolies differ from other competitors in three primary ways:

1. They are able to exploit massive economies of scale
2. They are able to extract an “economic profit” from their business
3. They are regulated by the political-economic system, rather than just by its subset, the economic system

“Economy of scale” refers to the decreasing per-unit costs experienced when a given fixed cost is split over a larger production run. This is a well known concept, and I won’t talk more about it here….

Read the rest here.

I do treat posting and moderating at ZP differently than commenting elsewhere or, especially, on a site like Twitter which is better suited for demonstrations of wit or making quick connections than depth. ZP is deliberately open to different POV by design, so a Clausewitzian is as welcome to guest post here as a Boydian, left of center commenters can talk with conservatives. Generally, the comment section here is remarkably intelligent, civil and positive, even when people disagree sharply.

Insofar as I tweet on education reform, I am far less evenhanded primarily because  a) Twitter is not a forum for which I have any moderating responsibility, and b) Many of the best known proponents of corporate Ed Reform, such as Mayor Mike Bloomberg,  Jonathan Alter,  Secretary of Education Arne Duncan, Governor Christie, Governor Snyder, Governor Walker and various itinerant billionaires, are engaged in a well-funded, well-orchestrated IO to demonize public education, teachers and their unions. Intellectual honesty has not been a hallmark of their political campaign against public education or of the self-dealing nature of their reforms,  or of  their results.

When I get a more substantive critique of public education or ed reform, like Dan’s post, I treat that with greater seriousness than pronunciamentos from oligarchic charlatans. Let’s dig into TDAXP!:

I think the general principle behind this comment is that any organization in a monopoly position is unconcerned with quality. This viewpoint is generally held, and wrong.

Actually, I had not thought that far down the road as modulating quality levels because a monopoly has not yet been established. Pearson, in alliance with the Gates Foundation, the National Governor’s Conference, many smaller Ed Reform players and the Obama administration, is *aspiring* to monopoly status in the ed publishing industry by becoming the official “go-to” publisher for school districts with material and standardized tests that meet the Common Core Standards.

[ The Gates Foundation, BTW,  is in this for the long haul, they started down this road with Acheive, Inc. in the mid 1990’s. This has been a far more strategic campaign in terms of planning than, say, US foreign policy in Afpak. Maybe we should put Bill Gates on the NSC or JCS]

The current state of the ed publishing industry after years of corporate mergers, is  technically one of oligopoly. How likely is Pearson to succeed in this gambit of acquiring monopoly status?  They are in different stages with the fifty states, but my advice is: buy lots of Pearson stock. There will be other publishers meeting niche needs (special ed, ELL etc.), or specific ed standards set by quirky, ideological, states like Texas and California, but Pearson will be the 800 lb gorilla. Regular publishers have no interest in entering the complex (in terms of non-market barriers to entry) textbook business and psychometric testing is even further afield for them.

Pearson is well placed to acquire the monopoly advantages discussed at TDAXP.

Dan’s post becomes very interesting here:

The third point is the most important here. All firms can fail by lack of understanding — that is, thru the economic system — whether they are monopolies or not. Both GM (a monopoly) and Wang Laboratories (not a monopoly) saw their position decline because of terrible product and marketing decisions. While monopolies have a greater buffer and farther to fall (because of their economies of scale and economic profits), sustained stupidity can still do the monopoly in.

Monopolies, however face an additional risk. They can fail by lack of empathy. A monopoly that fails to flatter sources of political power can be broken through political means, regardless of economic realities. The Bell Systems, for example, flouted the ideal of unregulated competition (thus alienating a radicalized political right) at the same time they were a major supporter of hard sciences research and engineering (thus alienating a radicalized political left). Even though AT&T consistently understood the market’s desire for a reliable, predictable, and always-on communication layer undergirding business, AT&T’s monopoly was destroyed due to their lack of empathy.

While “empathy” is an odd term in an economic discussions, it is particularly relevant concept to monopolies that are not natural -ie – ones established and maintained at least in part through favorable governmental regulation or subsidies and relationships with powerful politicians. So while I disagree on some technicalities (neither GM nor teacher’s unions are formally monopolies), that is unimportant in relation to Dan’s larger point – sensitivity to and accurate orientation of the political environment is critical where the free market is not in play and the government is determining market entry and other “rules of the game”.

By being obtuse, the leadership of the NEA and the AFT were largely asleep at the wheel as an elite nexus of billionaires, corporate interests, hedge fund managers, Harvard University’s College of Education and various ideologues quietly isolated them from their traditional power base in the Democratic Party, cultivated influential supporters in the major media and crafted a powerful ed reform narrative (that this narrative is exaggerated or at times false is irrelevant to whether or not it succeeds in becoming conventional wisdom). When the attack on public ed was launched in earnest after 2008, union leaders were paralyzed as ed reformers had gotten into their OODA Loop. 

Teacher’s unions  have recovered their footing at the state level, primarily because state level politicians through whom the ed reformers work are now aware that ed reformers have a pile of money but bring very few votes to the table on election day. By contrast,  “reforms” rammed through state legislatures that threaten widespread disruption of family life (such was where one’s children go to school), seem designed to benefit elite corporate interests and are nakedly hostile to teachers create a voter backlash.  At the national level, the teacher’s unions still seem to believe that the Obama administration is their ally. Legacy thinking  they will come to rue.

In the education sector, the monopoly held by teachers front organizations. By failing to provide the services they were supposed to provide — educating the young  — the teachers drove parents into debt, employers into the immigration debate, and States into powerlessness over education policy, teachers displayed a lack of empathy. This unconcern for the well-being of other stakeholders has consequences.

Here, TDAXP operates from the premise that all public school systems are failing and the primary or sole cause is incompetent teaching and that teacher’s unions have a monopoly control over the labor pool. All of these claims are false due to their sweeping nature. Some schools and districts are excellent, some are average and some are failing. The failing schools have more than their share of ineffective teachers but ineffective teachers are not the only cause of school failure – a bankrupt district without a tax base and a student population in poverty won’t be able to hire enough teachers, much less attract the best candidates.

That the NEA and AFT have not done enough to change failing schools is true, but where corporate ed reform holds sway, these vulnerable but difficult to educate students are being abandoned by charter operators whose corporate existence is predicated on serving those very children, while subsidizing  the wealthiest.

Publishers are as self-interested and greedy as teachers. They also, like teachers, aspire to monopoly bargaining power. But this does not mean that publishers won’t create tests, evaluate tests, or even improve tests.

Publishers will create materials that will satisfy statutory bidding and educational regulatory requirements when selling to public education entities. Tests are only as useful as their validity, reliability and the competence of their administration. Selling an invalid state test eventually costs a vendor a contract, as it did in Illinois ( though it took years and much wasted taxpayer dollars to do so). The highest quality tests, in psychometric terms, are fairly expensive products and usually are not sold on a mass-market basis to public schools, though they buy some of them, mainly IQ tests, for one-on-one student testing. The best business strategy for a publisher is to create tests slightly above regulatory requirements in psychometric quality and slightly below their leading competitor’s test in terms of price.

The perfect task for a monopoly.

Strategist and military analyst Frank Hoffman, now Director of National Defense University Press, takes a warm view of the new strategic guidance from DoD as a risk balancer in line with a dire fiscal and political reality. A “Pivot and Partner” strategy:

DefenseNews – Pentagon’s New Guidance: Sound Strategy Intricately Linked to Policies 

….Despite the fact that the Pentagon’s guidance represents the essence of “good strategy,” it was immediately panned by numerous pundits and several serious commentators who should know better.

What my critical colleagues have a problem with is not this document’s long-overdue need to reconcile our interests, priorities and resources. No, the real problem is that this guidance reflects a policy decision to sacrifice nearly $500 billion of planned increases to the defense budget over the next decade. Rather than resolve the strategic solvency gap between America’s goals and funding, the guidance’s critics want to continue to borrow money to maintain an unsustainable agenda.

The most common criticism is that the guidance is risky. There is little doubt that reductions in defense spending of the size now contemplated will increase risk. Such risks would be even more severe if sequestration is triggered by political gridlock.

However, the critics have no concern for the risk of fiscal collapse or the risks borne by the lack of renewal in the foundation of America’s power. Nor can they find fault with the increased risk borne by the $2 trillion already spent to prosecute two wars and build up America’s military budget to its current high of $550 billion, which exceeds Cold War-era spending levels. That’s the sort of thinking that partially got us into our economic crunch in the first place.

I have been reading about the potential of 3-D printing here and there, particularly at John Robb’s   Global Guerrillas site. It looked hopeful as a technology vector, but not having a tech background myself, it was harder to envision the parameters of potential application and their possible economic impact.

The following short TED talk by Lisa Harouni I found to be a useful intro for the non-engineer. Much of it is illustrated by specific examples:

My first thought, given the low and descending cost of these devices, coupled with increasing sophistication and power is the boon it will be to small to medium sized manufacturers locked into competition with low-cost foreign producers. Transcontinental transport costs are instantly axed from the price while maintaining quality control (something most Chinese manufacturers, for example, have trouble attaining to level demanded by high end customers). It also revolutionizes the “high end” market for customers demanding unusual or specifically customized products.

The second thought is Harouni’s remark that 3-D printing makes possible devices that could not be manufactured in any other way. That’s an affordable, economically transformative, technology put in the hands of a new generation of “garage tinkerers” – the next Steve Wozniak and Steve Jobs are out there, somewhere.

My third thought is, that our present elite, who are deeply vested in a crony capitalist ethos, gatekeeping and policies that create economic stagnation while “locking in” their comparative socioeconomic advantage and power as a political class, will eventually look askance at ordinary people having access to this technology.

When lobbyists from fortune 500 companies or foreign countries(!) begin squealing about losing market share to small-fry manufacturers, expect efforts to create regulatory barriers to market entry with 3-D printing in the same spirit that politicians today want to legislatively “roll back” the disruptive effects of unregulated internet access at the behest of the copyright cartel.

3-D printing technology needs to become as widely dispersed as computing itself, in order that not happen.

Via Shlok, cutting edge thinker, strategist and amigo  John Robb has launched a new site, add it to your daily “must read” list or blogroll:

Resilient Communities

What Resilient Communities .com does

How do you take control of your life in an increasingly unstable world?

1. Decide.  Right now, your success is akin a cork on an increasingly turbulent ocean.  Change that. Make the decision to take control of your future.  This decision requires a change in mindset and perspective.
2. Act.  Take steps to actively reduce your dependencies and gain degrees of freedom.  Learn how to produce what you need at a level that meets or exceeds what you currently buy.  Learn how to make an income either locally or online in a way that has meaning and substance.
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4. Community.  Build, join, or move to a local community that’s dedicated to building a resilient future.  A community that isn’t dependent on a global system run amok or vulnerable to disruptions.  A community that you can trust.  A community that rewards your contribution with reciprocal loyalty.  Learn how to form a community that’s worth living in and how to propel that community into a stable, bountiful future.

The goal of this site is to help you with every step along that path.

Discussion has been emerging in the foreign policy blogosphere of   late  regarding sovereignty and the other day, Afghanistan scholar Antonio Giustozzi opined on coercion, a necessary tool of a state seeking to wield a monopoly of force.

Theory is good and the discussion is an important one with implications for US foreign policy, but it helps when debate is informed by empirical examples from practitioners.  Quesopaper, a blog by  someone out in the field  in Afghanistan has been dormant for a while, but sprang alive again with a timely post:

Rule of Law, The Afghan Springer Show 

….Rule of Law is one of the key aspects to “fixing” Afghanistan. When the Taliban dominated the country, they controlled the “courts.” As Taliban influence waned, the US and partner nations have sought to create a more traditional court system. I can’t speak intelligently on why “WE” decided to create a more western form of law in Afghanistan, but I can say, it’s not the correct approach.

I work in a remote district. It’s over an hour to the main provincial (think state) government center. The difference between the two places is about as extreme as possible. The villages, even the district center (think country govt) lack ANY essential services. There are no plumbing systems, no electricity, no garbage service…nothing. Yet, the people here survive; and dare I say? Thrive.

Like most farming folks, the people here like to be left alone. The people appreciate the Govt–Government of the Islamic Republic of Afghanistan aka “GIRoA”–but they only want so much help. Rule of Law doesn’t fit into their needs.

So, how do rural locals settle disputes?

I just recently worked with a local governor as he negotiated the resolution of a 25 year dispute. Dispute doesn’t really describe what happened…feud is more appropriate. Each side had multiple murders, one family had 1300 fig trees destroyed. Decades of money in dispute. The feud was complicated enough that the Taliban failed to resolve the issue in nearly seven years of negotiations. Negotiations require buy-in from many parties…I could go on about this, but I doubt I can make it any clearer…

Land disputes are among the thorniest local civil society issues in Afghanistan, and one where the generally corrupt and inept Karzai regime draws a particularly poor comparison with the Taliban insurgency’s ability to provide “rough justice” where the richer, more influential party to the dispute does not automatically win through bribery. Land claims are blood issues in peasant-agrarian societies in general and all the worse in honor cultures that tolerate vendettas – that the brutal Taliban could not force a settlement in this case, or did not dare to try – speaks volumes.

….Finally, our district (county govt) governor is called upon to start the process of reconciliation. This BTW is MAJOR progress for the legitimacy of GIRoA. It means the people trust this man to handle this dispute. It might become national news (for Afghanistan) though you will never hear this story on any US network or .com site (except quesopaper.com). After weeks of massaging each side, pulling out their story, commitments (commitment to settle is vital in these things) and “evidence.”

An aside about evidence…in a society that is mostly verbal and illiterate, nearly anything written can become something that it is not…WTF are you talking about Pietro? What I mean is, give someone who can’t read a document. That paper is written in a foreign language, with foreign letters. Tell him its a deed to a piece of land…wait 35 years. Now, tell that man’s grandson that the land he’s been farming for 10 years; that his family has worked for generations, isn’t actually his.

Now he has nothing; he can’t provide for his family. Tell him, his paper is a receipt for a Persian rug, not a deed…explain that he owes the real land owner for the use of that property and revenues generated. Let me know how that goes…if you smell cordite it probably didn’t go to well.

For very poor people who live at the margins of subsistence, the stakes could not be higher, which can make rolling the dice on private violence attractive (this is also why land reform programs are only a short term stopgap in economic development and reform. Agrarian population almost always exceeds arable land and as the plots get smaller, they are less productive).  Dying on your feet with a weapon in hand looks a lot more honorable to a hard-pressed farmer than watching your children waste away from starvation as the other villagers gossip about your plight.

A state with legitimate authority can preempt or suppress such private violence, but is also expected to solve the problem.

….Back to our story…The governor calls in Sharia/Islamic law experts and elders from both tribes and other community elders. Mix that group into a bunch of small rooms and start shifting groups from room to room…hours of discussions (which looks like arguing to me). Don’t forget, this thing hasn’t been settled before, it’s serious business, and here serious business is settled with an AK. At anytime the whole ordeal can melt into violence.

Success is fleeting. I have a gun, no fooling…I’m armed….

Go to quesopaper to find out what happened next. 🙂

Part of the problem is, as quesopaper indicates, our Western framework. We began experimenting with rule of law to settle property claims and commons rights starting, oh, in 14th century England with land enclosures and we did not really finish for good until after Reconstruction in the very late 19th century. That’s 500 years for the “Rule of Law” as we understand it to become the standard for 100 % of the population, 100% of the time.

And along the way, there was blood. Rivers of it. From the Highlands of Scotland, to the piney woods upcountry of Appalachia to the Black Hills and the great Western Range Wars. The gavel of the judge had to be preceded by the soldier’s rifle, the settler’s six shooter, the rebel’s musket and knives used in the dead of night.

Are Afghans in far rural villages closer to a Manhattan attorney or an English tenant whose access to the pasture has been closed off by his noble lord against all custom and ancient right? What quesopaer is seeing is “state building” from scratch, from the bottom up. Slow, painful, difficult to be certain, but more likely to be durable than imported abstractions imposed from the top down.

We are leaving Afghanistan, it is clear. Any state that we leave behind that can resist the Taliban must be able to stand behind and enforce a rule of law as Afghans understand and accept it.