Notes on a Theory…

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Exploitation, Hard Work and Motivation: Wall Street and the School House Part II

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This is the second of three posts on Karen Ho’s Liquidated: An Ethnography of Wall Street. See also Part I and Part III.

Karen Ho reports that one defining feature of work on Wall Street is exploitation: specifically incredibly long hours and very hard work.  She calls it “a white collar sweatshop.” (84) Recruits experience shock when they realize what their working conditions will be like. But ultimately, this work is seen as justifying the vast differences in rewards they receive and great inequities among them.  “Unlike most workers in the neoliberal economy, elite Wall Streeters still experience a link between hard work and monetary rewards and upward mobility—although that link is importantly enabled by prestigious schooling, networking and a culture of smartness.” (74) Yet they (wrongly) imagine that others in the economy did not work hard—that the rest of corporate America worked nine-to-five. (103) “On Wall Street,” Ho says, “overwork is a normative practice.” (99) Indeed, these two things go together—Wall Street’s denizens believe they are smarter and work harder than everyone else, and that this justifies the power they wield in the country and around the world.

Wall Streeters also experience considerable insecurity. While they blame downturns for bouts of joblessness, in fact downsizing occurs in good times and bad. Often, but not always, the bottom performers are those let go—a constant cleaning out and bringing in new recruits. This insecurity is what they impose on others, but due to their elite status the implications on them are different than they are on everyone else. They can trade on their prestige and connections to find similar employment, and do not face the problem of having little or no money to get by in the meantime.

Ho explains the compensation process on Wall Street as driven by a culture of high risk / high reward. Prior to being hired, as we saw before, non-monetary concerns are central to recruitment. But after being hired there is a denial  that there is any motivation other than financial reward. Ho reports that her informants insisted that this is how jobs should be structured: “They enter into a ‘risk-reward’ bargain they fully accept, and it is through this experience that investment bankers learn ‘who is flexible and who can accept change.’” (274) Why is this flexible stance so important? Because of the strategy of no strategy: “to have no long term plans”, thus allowing “immediate responsiveness ” to a changing market. (275) Change is highly valued, partly to facilitate the taking of great risks. If these didn’t work out, they could land at another firm, and if the firms got into trouble, everyone assumed the government would bail them out (something the rest of us do not enjoy). That is, the risk that they accept is related to their immediate jobs, not their long-term prospects, the health of their firms or the systematic risks they impose on the world beyond.

Reformers have often engaged in attacks on public school teachers insisting that—as a class—they do not work hard, they are overpaid, and that “tenure,” meaning due process, allows lazy and unethical teachers to remain in their jobs forever leaving administrators with no recourse.  These claims are made all the more strongly if those teachers are protected by a union. Teachers are lambasted for having summers off, for resisting increases in their hours (generally without any increase in pay).  Traditionally teaching has been seen as a profession, which entails having a voice in how schools are run, a certain level of control over what is taught and how, and requiring significant training and an apprenticeship.  Reformers have sought to challenge these notions, by placing power in the hands of “supermen” and introducing inexperienced and untrained but ‘smart’ TFA recruits to replace experienced teachers.

One of the central complaints from reformers about is that they are not paid for “performance.” Teachers’ salaries used to be a product of both years of experience and formal training, with those with more advanced education degrees making more than those with bachelor’s degrees. Teachers were presumed to be motivated by a range of things, including concern for children and security. Reformers—operating under the assumption that monetary rewards are primary—have insisted that teacher’s salaries should be tied how well their students do on standardized tests.  They have pushed ideas like Value Added Assessment, which seeks to isolate the impact of each teacher on the scores of their students as they change from year to year. Testing is not just tied to salaries, but used to justify firings and closing schools. But given that test scores are closely related to socioeconomic status, and schools which educate students at the bottom of the socioeconomic scale begin already under-resourced and bear the brunt of these policies, the end result  is to punish the most disadvantaged students and those who work with them. But the reformers argue that the sticks of the threat of losing one’s job, of one’s school being closed, and the carrot more money for higher test scores will overcome these barriers. They also dismiss the idea that addressing poverty or resource inequality should be central in improving education, instead  arguing for a stance of “no excuses.”

What about working conditions? Shawn Gude draws a parallel between current battles in education and earlier ones in industry.

There’s a special resemblance between the struggles against scientific management, or Taylorism, and today’s teacher resistance to corporate reform schemes. Just as factory workers fought top-down dictates, deskilling, and the installation of anemic work processes, so too are teachers trying to prevent the undemocratic implementation of high-stakes testing and merit pay, assaults on professionalism, and the dumbing down and narrowing of curricula.

There are more obvious parallels:…The nostrums of both Taylorism and the education accountability movement paper over foundational conflicts and root causes. Many of those who espouse education reform cast their solutions as unimpeachably “scientific” and “data-driven,” yet as with scientific management partisans, the empirical grounding of their prescriptions is highly dubious. And proponents of scientific management and corporate school reform share an antipathy toward unions, often casting them as self-interested inhibitors of progress.

In short, the sum total of the reform agenda means deprofessionalization, deskilling, and worse working conditions for teachers.

The strategy of no strategy, or at least aimlessly shifting strategies, has its parallels in the work of large-scale philanthropy.  A small number of wealthy foundations have a played an oversized role in setting the agenda for education.  Joanne Barkan details one example of a strategic shift:

In 2000 the [Gates Foundation] began pouring money into breaking up large public high schools where test scores and graduation rates were low. The foundation insisted that more individual attention in closer “learning communities” would—presto!—boost achievement. The foundation didn’t base its decision on scientific studies showing school size mattered; such studies didn’t exist. As reported in Bloomberg Businessweek (July 15, 2010), Wharton School statistician Howard Wainer believes Gates probably “misread the numbers” and simply “seized on data showing small schools are overrepresented among the country’s highest achievers….” Gates spent $2 billion between 2000 and 2008 to set up 2,602 schools in 45 states and the District of Columbia, “directly reaching at least 781,000 students,” according to a foundation brochure. Michael Klonsky, professor at DePaul University and national director of the Small Schools Workshop, describes the Gates effect this way:

Gates funding was so large and so widespread, it seemed for a time as if every initiative in the small-schools and charter world was being underwritten by the foundation. If you wanted to start a school, hold a meeting, organize a conference, or write an article in an education journal, you first had to consider Gates (“Power Philanthropy” in The Gates Foundation and the Future of Public Schools, 2010).

In November 2008, Bill and Melinda gathered about one hundred prominent figures in education at their home outside Seattle to announce that the small schools project hadn’t produced strong results. They didn’t mention that, instead, it had produced many gut-wrenching sagas of school disruption, conflict, students and teachers jumping ship en masse, and plummeting attendance, test scores, and graduation rates. No matter, the power couple had a new plan: performance-based teacher pay, data collection, national standards and tests, and school “turnaround” (the term of art for firing the staff of a low-performing school and hiring a new one, replacing the school with a charter, or shutting down the school and sending the kids elsewhere).

Next post: on markets and “choice.”



Written by David Kaib

June 4, 2014 at 8:00 am

3 Responses

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  1. Such a great series Dave, so glad you found this book. This might be jumping the gun on post #3 but I wanted to chime in and talk about a liquidity, character, and the social mission of these institutions because I think there’s another parallel between Wall Street and ed reform that we can draw out from Ho. She writes:

    “For Wall Street bankers, one of their key imagined social roles as ‘market doers’ is to create liquidity, to speedily unlock and allocate money (as in the takeover movement) to its ‘best’ use. Through their own immersion in the market, especially the anxious, difficult experiences of constant downsizing and reinvention, their skills and lives—embodying the market and their roles in it—have also become ‘more liquid.” (244)

    Traders justify their high pay not only by their smartness and overwork but by their perceived social benefit: They inject liquidity into illiquid markets or commodities, they make markets where there weren’t markets before. This generates shareholder value but, by a neat trick of historical revision, shareholder value is conflated with economic value more generally. So not only are they justified in theirs risks and bailouts and what not by providing liquidity to businesses who need it, but by a sort of trickle-down cultural intervention where staid institutions are liquidated and become better able to adapt to quickly changing and increasingly global economic conditions. So bigger institutions and different people get modeled on the personal lives of financial elites: constant downsizing and reskilling is prized above all, and rewards are based on bonuses and other deal-related incentives and not on anything related to the underlying asset, let alone anything approaching a long-term investment like a salary or a pension.

    This again sounds a lot like ed reform. In a lot of ways schools are an easy target. Like any good democracy, we identify the fate of our communities with the fate of our schools and so doing something, anything, can make us feel empowered and community-oriented; and like any bad democracy we use schools as proxy battlegrounds for everything from segregation to income taxes to eugenics. So the cultural battleground is cleared in advance for reactionary school-grabs, because we’ve already been trained to treat these institutions as corporations in which we hold shares and see returns rather than institutions we build through consensus. Folks like Rhee then use meaningless phrases like ‘competition’ (over what?) and ‘efficiency’ (towards what?) to justify restructuring because any restructuring, any injection of cultural liquidity (union-busting) or financial liquidity (privatization via Gates et al), is an a priori good, a shake-up that makes schools more nimble, inventive, and productive. In this way, test scores are valuable not as proof of student learning but as something, anything, that can act as a metric for increased institutional liquidity. Test scores don’t have to actually stand in for anything meaningful as long as they can be tracked, changed, compared, wagered on and argued over. Just like the stock market.

    And here we start to see to the most important contradiction that comes out of the broader embrace of Wall Street professional values, this culture of liquidity. Financial elites and ed reformers must introduce liquidity in order to help us survive a rapidly changing market. But that market is produced, it’s not natural. So we have to liquidate ourselves to survive the liquid world that was produced without our consent. This increased liquidation always ends up undermining the underlying assets (homes, schools, factories) because all these use values can’t survive the conversion to pure exchange. The financial approach to the world, the liquid self, really is not that well adapted to the world beyond Wall Street but we’ve been convinced otherwise. W

    hatever, there’s always another market.

  2. […] Next post: on working conditions and “hard work.” […]

  3. […] 3. Exploitation, Hard Work and Motivation: Wall Street and the School House Part II […]

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