Alternative schools. Online education. Textbook innovations. Though each of these sounds like a potential fix to the challenges of today’s educational system, they’ve also all been tremendous portfolio busters for many of the professional investors who’ve attempted to reform education. In Class Clowns: How the Smartest Investors Lost Billions in Education, scheduled for release Nov. 8, author Jonathan A. Knee focuses on the for-profit education reform efforts — and failed investments — of four groups of investors: Rupert Murdoch and Joel Klein (Amplify), John Paulson (Houghton Mifflin), Michael Milken (Knowledge Universe) and Chris Whittle (the Edison Project). “Some of the most respected minds of our generation have invested many billions of dollars in for-profit education enterprises,” the Columbia University professor and investment banker tells us, “and, with surprising regularity, they have lost their shirts.”
What I liked: This in-depth look into a segment of the investment world I’d never really given much thought to before. Knee’s four case studies dive deep into the who, what and why of some of the most notorious failed attempts at educational reform while offering analysis on whether the financial losses could have been prevented. “Might the collective fate [of these investors] provide clues to the seemingly intractable challenges facing education more broadly,” he wonders right along with us at one point.
What I loved: How many parts of Class Clowns read just like a novel. (Okay, a novel with some dense economic chapters, but still…) I especially appreciated the author’s restraint in resisting what must have been a tempting urge to paint certain people or efforts as the “bad guys” trying to make a profit at the expense of public education. “In most cases,” he says, “the individuals involved appear to have been motivated, in part, by a genuine desire to improve education.”
Read Class Clowns if: You’re interested in a how-not-to primer on trying to use market principles to affect social change. If you’re an educator, student or parent with your own dreams of education reform, Knee also offers up multiple success stories to contrast his four case studies. Although Class Clowns could have come off as a depressing moral tale, it’s to Knee’s credit that we’re left with a vision — if not a wee bit of optimism — for how future investments in education reform might prove more financially and socially profitable for all concerned.