Independent Thinking’s founder Ian Gilbert was recently asked to contribute to an article for The Guardian on the possibility of state schools being run for profit in the UK. In particular he was asked about his experience of Chile’s system, often quoted as a good example of what happens when the state lets schools be run for profit. This he did drawing on his own experience working in education in Chile, from Independent Thinking’s work with educational charities there, anecdotal evidence from friends, family and colleagues in the country plus recent research. Here is the full contribution:


From graffiti on Santiago’s Universidad de Chile during the 2012 student protests in demand of quality, free education for all

In a nutshell, Chile is the neo-liberal experiment that the Right everywhere uses to justify their actions. Under the dictator Pinochet, a group of economists called the Chicago Boys who had studied under Milton Friedman*, had the chance to play with the whole economy, especially health, pensions and education. What had been a state education system going in the right direction (for an underdeveloped country) was divided into state schools, private schools and ‘subventioned’ schools, that is to say privately owned but state funded (with parental top-up). In another nutshell, in today’s Chile, the poor go to the state schools, the wealthy middle classes and upwards go to the private schools, the aspirational maybe with a bit of money upper lower classes stretch themselves financially and send their children to the subventioned schools. This ensures that these parents, whose finances are already stretched paying for healthcare and pensions, are pushed further into debt, putting more of their daily spending onto their easily accessible credit cards.

The free state schools have the poorest facilities and the most challenging students (apart from a handful of ‘Bicentennial Academies’ which cream off any highly academic children from the ‘wrong end of town’).  Match that with a teacher bonus system with payment by results and you see that any half-decent teacher, paid very little anyway, is not going to be attracted to work in the state system, a vicious circle that is hard to break. Education may be the way out of poverty but not if it is of such poor quality that it’s not worth bothering with.

The subventioned schools seem to be businesses masquerading as ‘doing something for the community’. Many are run with profits as the main driving force and there are various instances of dubious owners cooking the books in order to obtain their government funding, as it is based on number on roll. They are still of poor quality from a pedagogical point of view and money that could be reinvested in order to make things better (better buildings, better trained staff, better equipment) goes to the owners instead. In fact, the whole neo-liberal process is one of osmosis, in which money works its inexorable way from the poor end of town to the rich end of town.

The private schools cater for the middle-class (ie white), the wealthy (whiter) and the very, very wealthy (about ten families who effectively own Chile. The Piñeras are one example, much of the current president’s $2.5 billion fortune coming from introducing credit cards to Chile. His brother is referred to as ‘the Pied Piper of Social Security privatization‘ and was Secretary of Labor and Social Security during Pinochet’s dictatorship – easy credit and private pensions both great neo-liberal wheezes. Another brother is the MD of one of Chile’s biggest banks. They don’t talk about their musician fourth brother).

The main purpose of the private schools is two-fold. Secondly, it is about getting the students through the ‘PSU’ which is the single, multiple-choice, computer marked (ie cheap to administer) university entrance exam that all children take and that ensures that poor people will fail to get to university because they went to the poor quality schools. And even if they do make it, they are then in debt for, literally, a lifetime (the OECD tells us that ‘the cost of a university education in Chile is the highest in the world taking into account the country’s GDP and per capita income’) paying off the tuition fees for the poor quality private universities that are owned and run by the rich (including Chicago boys and ex-Pinochet men). It’s worth noting here, too, that the law in Chile says that private universities are not allowed to be run for profit which is a claim put forward about Academies in England. But where there’s a will… For example, university owners also own the land and the buildings leased by their universities, not to mention the building companies when it comes to new facilities. In fact, in recent months, according to Americas Quarterly ‘eight Chilean universities violated anti-profiteering laws amidst findings of increased salaries among executives, circulation of finances between companies under the same private ownership and outsourcing of services as means of generating revenue’.

On top of that there is a huge industry in paid-for after-school tuition designed solely to get children as high a score in their PSU as possible. Another off-shoot of the neo-liberal dream. A child doing badly at school will be met with the stock response – ‘Get a tutor!’

First and foremost, though, Chile’s private schools are, as they are in the UK, a social-capital industry which will ensure that your children mix with the right sort of children and make the right sorts of connections that will then ensure they get the right sorts of jobs and marriages that will ensure their children will be able to go to the right sorts of schools which will ensure et cetera et cetera ad nauseam… As Orwell said in The Road to Wigan Pier, ‘middle-class people cannot afford to let their children grow up with vulgar accents’.

And the system works. There are people making a great deal of money from an education system that not only reinforces the segregation prevalent in Chilean society but also replicates it. The UK has one of the most segregated education systems in the OECD but Chile has the most economically and socially segregated education system in the world. The poor stay poor and badly educated; the rich stay rich and go to university and never the twain shall meet (unless the latter are employing a new maid or gardener from the ranks of the former).

So, when I see Bright Blue, the Tory think-tank citing Chile as evidence of how neo-liberal policies improve achievement in school then I know they only either know about – or care about – a small part of the picture. Like the Chilean right-wing politicians, they will have never visited the poor end of town and seen what it’s really like.

To go beyond my personal experience and knowledge, there is also research from the US that says, fairly unequivocally:

‘Yet thanks to a number of recent studies in the United States and in other countries, particularly Chile, we now know a lot more about educational markets—hence have much of the information we need to judge whether the claims are valid. The results of these studies suggest that, despite claims by proponents, markets in education improve academic performance little if at all. Neither do they provide significantly better education for the group that needs it most—low-income students. The results also suggest that successful privately-run schools are better at attracting relatively low cost students and at raising revenue than increasing educational productivity’

DOES PRIVATIZATION IMPROVE EDUCATION? THE CASE OF CHILE’S NATIONAL VOUCHER PLAN, Martin Carnoy, Professor of Education and Economics at Stanford University and Patrick McEwan, Assistant Professor, School of Education, University of Illinois From Choosing choice: School choice in international perspective, ed. David N. Plank and Gary Sykes, 2003.

It might be worth noting, too, that I have friends in Sweden who despair about their for-profit schools. They complain of children ‘in front of computers for hours’ while the companies, according to ex-government minister Lena Sommestad, make ‘big profits, which they don’t reinvest back into the school or even spend in Sweden – they put the money offshore, into tax havens’. For more news from Sweden click here.

But then, why not? For profit schools are exactly what they say they are – for profit. I happen to think schools can and should be for something other than that and the research – and my experience – back me up.

*NB For more about the connection between Friedman, Pinochet, Dick Cheney, Margaret Thatcher and the ‘War on Terror’ check out this video on Naomi Klein’s The Shock Doctrine.