How to waste $200 million on education

Education is the best investment. This theory is widely accepted and has taken its place in the academic literature as accepted fact. The numerous academic papers on this subject show the multiplier effect of education on personal earnings and societal earnings, making education the best overall investment vehicle a person and society can choose. So it is with great enthusiasm that I read excerpts and reviews of a recently published book written on a specific investment made in education and how it was wildly mismanaged. The book, "The Prize: Who's in Charge of America's Schools," by Dale Russakoff follows a $100 million investment commitment by Facebook's founder and CEO, Mark Zuckerberg, to the Newark, New Jersey, school system.

Having just gone through a first day at school experience with my daughter yesterday, education has been on my mind lately and will probably continue to be for many years as she advances through school. I often wonder where funds earmarked for education actually go and will continue sharing information on this subject as I learn new things. Growing up, going to nationally top-ranked public schools in upstate New York and later great private universities, a failed system of education is not something I experienced first-hand. Therefore, I listened in amazement to a several part series put together by WBEZ Chicago as part of its "This American Life" program. The series details several horror stories that parents in inner-city schools go through in an attempt to give their children a proper education. The aptly titled "The Problem We All Live With," series details how American schools have gone from being desegregated in the wake of a famous Supreme Court (Brown v. Board of Education of Topeka, Kansas) decision back to being de facto segregated in the last 30 years and how this has hurt everyone.

Zuckerberg's investment in Newark public schools may surprise many readers who come from countries like Turkey where education is controlled in the capital and decisions are implemented from the top-down. There are no "school districts" for investments to be made in much of the world. The United States has the polar opposite approach in which residents of school districts elect a "board of education," made up of fellow residents, which make up an executive committee that choose administrators to run schools in that district. Both systems have advantages and disadvantages, however, the current leader in education globally continues to be the United States, which may mean the local decision-making model is best for the children attending public schools in that district.

Russakoff's book details where the money was spent and where it was not spent. Zuckerberg attracted another $100 million in matching funds from other donors, making the total investment into the Newark School System $200 million. The lion's share of this money, $90 million, went to paying teachers, while $20 million went to consultants who oversaw the dispersal of the funds, nearly $25 million to other costs associated with bettering education in the district and finally, nearly $60 million went into improving charter schools.

The failure of the investment is not in this breakdown, it is in the fact that the $90 million budgeted to keep good teachers and attract better ones was actually used to just increase the pay of bad teachers who had seniority and attract better teachers who did not. The teachers' union in the district and the State of New Jersey was simply too strong and blocked any attempt to change the status quo. This makes sense, as unions' primary goal is to help their membership. The problem was that the local officials who wooed Zuckerberg to begin with, did not follow through on their promises to change the necessary laws that would help the investment make a difference. According to the book, Zuckerberg ultimately used the investment as a public relations move, announcing the $200 million the same week as a highly critical movie of him, "The Social Network," was released. The mayor of Newark at the time, Cory Booker, parlayed the investment into statewide prominence and became the junior senator from New Jersey in the U.S. Senate. New Jersey Governor Chris Christie also raised his national profile and is currently campaigning for the Republican presidential nomination. Everyone, but the students, ultimately benefited.

The gist of the book is that no amount of money can repair a broken system. Fundamental changes in the broken system are necessary before any added investment will do any good. Turkey's education system is one that has always been broken, and no government, from any party, will be able to change it without starting from scratch. New legislation scrapping the National Education Ministry (MEB) and the Executive Council on Higher Education (YÖK) while localizing education decisions appears to be the only way to fix this broken system. I hope to see such legislation enacted by whoever wins the upcoming parliamentary election.