Capital and privatised schools

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This is part three of my series of blogs which presents a critique of the privatisation of schools in England. In the first part I argued how the Education Reform Act (1988) created, effectively, a voucher plan for schools, a market was created, with per-pupil funding and specification of what schools as private operators would provide as a service, through the introduction of a national curriculum and national assessments. Following this, and having shown how the market was created, in the second part I use Marx’s theory of political economy to show the creation of knowledge commodities. My purpose for introducing the idea of commodity is to show how schools have become capitalist enterprises, outside of the state, and in turn how this has an impact on teachers’ working conditions, pay and access to quality continuing professional development. Overall, in this series of posts, I want to show how the privatised state education system undermines the professional status of teachers. My discussion of teachers’ work will come in the next blog. In this blog, I want to concentrate on the idea of capital. My overall argument is that teachers’ working conditions, how capital works in market-oriented enterprises and the production and provision of commodities are interlinked components of privatisation.

So, in this post my emphasis is on capital in the context of schools. What I will show here, drawing on the work of Marx is that schools, or a chain of schools operating within a marketized system has but one option and that is to accumulate capital. But before sketching out that argument, I should explain the idea of capital.

What is capital?

The Oxford English Dictionary presents an interesting etymology. The first recorded use of capital is c1225 as relating to the head, something at-the-top, to represent the principal or chief or important person. It is interesting that these early references to the use of the term capital in English are representative of power and capacity to coerce subordinates. In the sixteenth century capital broadened its meaning to include financial assets and thereby implying a recognition of the close relationship of money and power. In the nineteenth century, it was to represent profit, advantage and power. The contemporary term, interestingly integrates two aspects, a financial component and power.

The classical political economists Adam Smith and David Ricardo, referred to capital but were not specific about its meaning or indeed its nature. While they both saw capital as related to production of commodities and so to labour value, but apart from recognising that individuals could accumulate capital, they did not give it further consideration. Marx, however, was more precise about what capital was, in the sense of its social function and dynamic nature. Marx, argued that capital could be money, commodities or the means of production. But it had to be in circulation, either money being used to buy commodities and subsequently sell them or, as commodities being sold to buy other commodities. Inherently within the notion of capital is exchange of commodities and money. Like Smith and Ricardo, Marx relates capital to production and the cost of labour. Therefore, within capital, there is a labour cost, since circulation involves commodities. The relationship becomes important when I discuss teachers’ pay and conditions in the next blog but for now I will park the idea here.

Capital provides the means to produce commodities and to buy labour to enable this process. In my previous post I presented an analysis of the commodification of knowledge. The National Curriculum and the existence of national assessment codify knowledge commodities. The work of a school is the transfer of knowledge commodities to students[1]. The notional contract between the student and the school is to provide a minimum addition of knowledge commodity to the child’s level of knowledge on entering the school. If the school does not fulfil its side of the contract the student can go to another school. Or, if the school is not fulfilling its notional contractual requirements, the government can ask another organisation to take responsibility.

If schools are seen as producers or as service providers in the delivery of knowledge commodities in a market, then the role of the leadership becomes that of capitalist. They have to deploy capital for the provision of the service, in other words they have to employ teachers and support staff and maintain the school buildings and market the school. But they also have to accumulate capital to expand and to maintain a competitive edge in the market.

Marx showed that necessity of capitalists to incessantly increase capital. Chapter 25 of Capital Volume 1 sets out a general theory of capital accumulation. In one sense the accumulation of capital might be seen in terms of a thirst for wealth, that no matter how wealthy you are that thirst cannot be quenched. This was the classical political economist view of capital accumulation posited by Smith and Ricardo. For Marx, with a view of capital as dynamic and as money and commodity in circulation, capital accumulation is conceptually richer. The need for accumulation is driven by the need to respond to competition, who themselves will be engaged in capital accumulation, and one significant form of capital accumulation is through expansion in order to try and dominate the market. In Marx’s day that would mean acquiring more factories. In terms of schools, it means that the capitalist school leader necessarily is driven to run more schools. It is this principle that largely underpins the growth of a Multi Academy Trust.

The number of Multi Academy Trusts has grown from 391 in 2011 to 846 by July 2015 (Hill, 2015). The Harris Federation of South London Schools and Ark Schools are two large and established academy chains. I will look at the growth of each of these in more depth. The Harris Federation has its beginnings under the Thatcher government and just after the 1988 Education Reform Act. Phillip Harris, who amassed wealth retailing carpet and furniture, was asked by Margaret Thatcher to take over Sylvan School in Crystal Palace and to establish a City Technology College (CTC) (Graham, 2013). The Harris Federation now runs 41 primary and secondary schools. It is a private limited company by guarantee, incorporated in 2007, with three subsidiaries: Harris Academies Projects Limited, HCTC Enterprises Limited and Harris Professional Services Limited. It held net assets of £343,416,000 in 2015 which has grown from £86,437,000 in 2008 when it ran 6 schools.

Ark Schools was established in 2004 and now runs 31 schools with net assets[2] of £369,539,000 (2015) which has grown from one school in 2006, its net assets were £2,292,000. Ark Schools is part of a group of operations Ark UK Programmes Limited, Ark South Africa Limited, Ark Zimbabwe Trust, Ark Uganda, Ark India and Absolute Return for Kids US, Inc (Ark US). Collectively these hold net assets of £19,389,000 and publish separate accounts to Ark Schools to satisfy the funding agreement with the Department for Education.

The growth of these and other Multi Academy Trusts has been largely achieved through the transfer of state-owned assets to these private companies. However, the accumulation of capital is usually a result of the surplus value generated by the workforce. That is the difference between the exchange value of the commodity (or service provided) and the necessary labour cost i.e. that which the worker needs to live on. It is not clear the extent to which capital is being accumulated by the growing Multi Academy Trusts since their growth, as I have said, is largely through the transfer of capital from the state. However, as I will show in the next blog the undermining of teachers’ pay and conditions can be attributed to the privatisation process. And as predicted by Marx, the exploitation of workers contributes to capital accumulation. In fact the central thesis of the three volumes of Capital is that if the freemarket and its invisible hand is allowed to prevail, capital accumulates and workers become increasingly exploited. I am applying the same thesis in the context of the privatisation of schools. First by showing that there is evidence for privatisation, second by showing that schools now involve knowledge commodities and third by showing, in this blog, the incessant and inherent need for capital accumulation within a capitalist system.

In the next blog, I look at how teachers’ pay and conditions become undermined in these conditions of privatisation. And how this has an impact on teachers’ access to continuing professional development and professionalism and professional standing.

Notes

[1] I appreciate how hard teachers work in providing a rich and fulfilling experience at school, as well as in providing pastoral support. My analysis here is abstracted to capital, commodity and labour.

[2] I accept that net assets are not equivalent to capital, but I am assuming that to illustrate capital accumulation these values for net assets are proportional to capital. The growth in net assets therefore indicates the extent of capital accumulation.

References

Graham, N. (2013, April 26). CarpetRight’s Lord Harris reflects on a lifetime in the rug trade. Financial Times. London.

Hill. (2015, August 31). The rise and rise of multi-academy trusts – latest DfE data. Retrieved from https://roberthilleducationblog.com/2015/08/31/the-rise-and-rise-of-multi-academy-trusts-latest-dfe-data/

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  1. Pingback: The exploitation of teachers – Steve Watson

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