The New Corporate Republic, or The Predator State

The Texas Observer has this excerpt from a new book by John Galbraith, The Predator State. In it Galbraith urges liberals to abandon the free market shibboleths that conservatives abandoned following the failure of the Reagan Revolution. Below is the intro and the last part of the excerpt in which Galbraith sums up the neocons' inner rationale for their brand of education reform:

In his new book, The Predator State, James Galbraith charts the course of U.S. economic policy over the past 30 years, leading to the disastrous economics of the Bush presidency. Galbraith—an Observer contributing writer and holder of the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs at the University of Texas—shows how the ideology of the free market failed in application under Reagan but devolved into a mythology that still has many Democratic leaders mouthing its creed. Meanwhile, Republicans under Bush have moved on to a new vision of the corporate republic, in which public purpose and public resources become fodder for corporate profit. In the following excerpt from the book, Galbraith—son of the late economist, author, and ambassador, John Kenneth Galbraith—explains the current health-care and public- education debates as they play out in the “predator state.”

As power ebbed from the corporation in the late 1970s and 1980s and became vested, once again, in free-acting individuals, the basis for collaboration between comparatively progressive elements within business and a broadly progressive state tended to disappear. Instead, business leadership saw the possibility of something far more satisfactory from their point of view: complete control of the apparatus of the state. In particular, reactionary business leadership, in those sectors most affected by public regulation, saw this possibility and directed their lobbies—the K Street corridor—toward this goal. The Republican Party, notably in the House of Representatives under Newt Gingrich and later Tom DeLay, became the instrument of this form of corporate control. The administration, following the installation of George W. Bush, became little more than an alliance of representatives from the regulated sectors—mining, oil, media, pharmaceuticals, corporate agriculture—seeking to bring the regulatory system entirely to heel. And to this group was added another, overlapping to some degree, of equal importance: those who saw the economic activities of the government not in ideological terms but merely as opportunities for private profit on a continental scale. Jack Abramoff became, for a moment, the emblem of this class.

. . . .

Schools have been a bastion of American public effort for nearly two centuries, and they are today on the front lines of the Predator State. Early in the Bush administration, policy toward the public schools took the form of advancing voucherization, a system that would have allowed a partial state subsidy for alternative schooling, encouraging middle-class parents to take their children to the private sector. (Such a system exists in Chile, having been created by the military regime of Augusto Pinochet.) The not very effectively disguised purpose was to get public funding into the hands of for-profit and religious entities, which would then set up voucher-eligible schools. The clients of this new system would have been middle-class parents unhappy with the public schools, able to spend something from their own pockets on their own children’s schooling, but not willing to pay for private schools on top of the taxes that support their local school board. Vouchers would in effect permit those parents to pull their property tax payments from the public system.

The idea of vouchers, whose origins go back to Milton Friedman himself, once again rested on a rhetoric of markets, competition, freedom, and “school choice.” But by and large, the public has not been persuaded: vouchers enjoy little public support, and the proportion of American children attending public school has so far not materially declined. It developed that even most middle-class Americans were not sufficiently unhappy with the public schools their children were actually in to risk confiding their children to schools not yet in existence, whether run by for-profit educational corporations or by churches. Nor were they willing, as a group, to desert the social and community networks that in many American communities are organized around the public school systems.

Taking stock, the Bush team switched its emphasis to No Child Left Behind, a program that expanded federal spending on public schools while imposing an intense testing regimen on them. Forms of predatory free enterprise in which certain Bush family members participated (selling test preparation programs to public school systems) quickly emerged. But the larger effect of NCLB was to foment middle-class discontent with public schools, for three reasons. First, the testing regimes cut deeply into the flexibility and creativity in the classroom, discouraging creative professionals from becoming teachers and demoralizing many who remained. Second, the emphasis on teaching to the test undermined educators’ attention to and the resources available for untestable programs, including art, music, and athletics. And third, the harsh evaluation regime behind the tests themselves worked to label, and therefore to stigmatize, certain schools as failing. From the standpoint of both parents and teachers, schools that were judged to be failing by the test results sometimes were not. But this was beside the point: a bad test result could have serious, even catastrophic effects on reputation and funding, precipitating middle-class flight from the system. In this way, NCLB would feed the demand for vouchers later on.

From The Predator State by James K. Galbraith. Copyright © 2008 by James Galbraith. Reprinted by permission of Free Press, a Division of Simon & Schuster, Inc.