High Button Shoes and Education Reform

As a very young child, I was fascinated by my grandmother’s collection of button hooks. It was the mid-1940s and high button shoes had been out of style for decades. She collected the hooks that were used to pull the tiny buttons through the holes that ran up the sides of the ladies’ shoes back in the early 20th century.

Often made of silver with decorative handles of porcelain or glass, the hooks made for an attractive display.

Warren Buffett and Charlie Munger, his long-time partner at Berkshire-Hathaway, also had a connection to shoe buttons. Munger’s grandfather had managed to corner the market on shoe buttons back around 1900. The grandfather exercised a virtual monopoly over their production and sale. Emboldened by his business acumen, the old man grew to believe that he not only knew more than anyone about shoe buttons but that he knew more than anyone about anything—and he preached and proclaimed at length on such. Munger and Buffett named the syndrome the Shoe Button Complex, and they encountered it frequently in their dealings with successful business practitioners.

Now Buffett struggled assiduously to avoid developing the Shoe Button Complex. As one of the richest persons in the world, the temptation to succumb would surely have been great. He was careful to restrict his actions and speaking to what he called his Circle of Competence. He recognized that there were a limited number of things he could know well, and he did not presume to act as though he was expert of those things lying outside the Circle.

Buffett’s recognition of his Circle of Competence led to some surprising decisions as he approached and passed his 80th birthday. He did not understand the emerging digital technology, and while the masses were losing their shirts trading high tech companies, Buffett was buying stocks in railroads and underwear manufacturers. Poseurs with enormous Circles of Competence scorned the old man when he reminded them that in the past 120 years in the U.S. more than 1,000 automobile manufacturers came and went, leaving just four. Buffett’s rise to the top of the list of the world’s billionaires left him with a problem as he saw the end of his career approaching. How does one with a small Circle of Competence give away tens of billions of dollars to some good end?

Bill Gates and the Shoe Button Complex

Buffett startled the world when he announced a few years ago that he was leaving his great wealth to the Bill & Melinda Gates Foundation. Buffett spoke thus in addressing the question of why he turned over his philanthropy to the Gateses:

Bill Gates is the most rational guy around in terms of his foundation. He and Melinda are saving more lives in terms of dollars spent than anyone else. They’ve worked enormously hard on it. He thinks extremely well. He reads thousands of pages a year on philanthropy and health care. You couldn’t have two better people running things. They have done incredible work, they’ve thought it through, their values are right, their logic is right. (p. 768 in The Snowball: Warren Buffett and the Business of Life)

Well, Buffett’s decision presents us with a conundrum. If he is not competent to determine the worthwhile recipients of his beneficence, then how is it that he knows that the Gates Foundation is dispensing beneficences in a worthwhile way?

Education is an arena particularly prone to attracting Shoe Button Complexes. Everyone has been to school; everybody thinks they know what is wrong with schools.

And so we come to the question, How is the Gates Foundation doing these days? This question is of more than passing interest on account of the fact that the Foundation is dispensing roughly $400 Million a year to education related causes. Moreover, some utterances by the benefactors have raised eyebrows among groups that have long made the search for understanding education their preoccupation. For example, Melinda Gates startled her interviewer on an NPR program in 2007 when she seemed to suggest that 100% of high school students should continue their education into college.

(Interviewer) I just want to ask you about a statement on the Bill and Melinda Gates Foundation's Web site that I read, which is that, "All students in the United States can and must graduate from high school, and they must leave with the skills necessary for college, work, and citizenship." I think everyone would agree that they better leave with the skills for citizenship because everyone can vote at age 18, and we urge them to. College. Can we reasonably expect 100 percent of high school students to become college students?

(Melinda Gates) Yes, I think we can. And, in fact, I'm here today in the Chicago school district visiting with students – huge number of Latinos and African-American populations, and guess what? I'm in schools where 95 to 98 percent of these kids are going on to college, and it's because they started freshman year with teachers who believe in them and said, 'These kids can do it.' …

(Interviewer) That would be a dramatic increase of the share of high school students, if 100 percent went on to college. I mean, you would be effecting an enormous social change if you could reach – (Melinda Gates) Correct, and that is the idea.

(Interviewer) How many years do you think it would take to achieve that particular – (Melinda Gates) I think it is going to take us quite a while. I think that this is a long-term effort and I think it's one that the foundation is going to be at for a very long time. ... (See the entire transcript here.)

We may be looking at a Circle of Competence problem here. And the situation may not be much better with her husband, who teeters dangerously close to the edge of a Shoe Button Complex. Bill Gates has referred to Diane Ravitch as “public enemy #1” of effective education. Whether either Diane Ravitch or the nation’s schools fall within his Circle of Competence is questionable. A few years ago when Gates testified to Congress on the current state and future of American education, he spent most of his time complaining about difficulties in obtaining visas and green cards for young tech employees of Microsoft. That his interest might be stronger in promoting the health of this business than in promoting the development of the nation’s children may be understandable. After all, what does the richest man in America really know about the needs of the nation’s children—the vast majority of whom will hold a half dozen low-level jobs during their lifetimes in industries like recreation, food services, child care, health care, and the like?

Now my own Circle of Competence does not extend much past some understanding of what is happening to K-12 public education in America. Thanks to Ken Libby of the National Education Policy Center and his analysis of the Gates Foundation grants to U.S. education, we have at hand new information about what Bill & Melinda Gates consider to be efforts to improve schooling that are worthy of their own and Warren Buffett’s support. The following table shows Libby’s breakdown of where Gates Foundation money for education went in the three years from 2008 through 2010.

Category	Total $ 2008-2010	%
Charters	$73.1M	7
Alternative Public Schools	$97.8M	9
Private Schools	$47.4M	4
Small Schools	$30.1M	3
School Reforms	$61.4M	6
Government Agencies	$9.0M	1
Advocacy	$116.8M	11
Think Tanks	$10.0M	1
Research	$78.6M	7
Development	$112.6M	10
College/Career Ready	$52.4M	5
College Completion	$145.4M	13
Common Core	$18.5M	2
Early Learning	$46.8M	4
Conferences	$10.0M	1
STEM	$26.0M	2
Human Capital	$104.0M	9
Media	$17.0M	2
RTTT & i3	$4.7M	0
Other	$40.2M	4
Total	$1,101.8M	100%

I leave it to the readers to make their own interpretations of the mind-set that lies behind these kinds of allocations. As for me, that mind-set shows little faith in the development of better education for the vast majority of America’s children, particularly children in poverty. It is a mind-set that comes about from drinking the Kool-Aid that the “market” will lead America’s schools to the promise land.

Consider the following example of how money from the Gates Foundation is being spent. A proposed law in Florida named Parent Empowerment was pushed this legislative season by a California-based group called Parent Revolution. Parent Revolution is funded by Gates, the Eli Broad Foundation, and the Walton Foundation. If Parent Empowerment became law in Florida, then 51 percent of the parents in a public school could sign a petition that would give them control of a school and give them the power to decide whether to close it or turn it over to a charter management organization. It is not difficult to see who the true beneficiaries of this bill would be. In fact, the parent Empowerment bill could have been written by lobbyists for the education management industry. (See Diane Ravitch's report on the true parents uprising that defeated this bill that was nonetheless backed by former governor Jeb Bush and current governor Rick Scott.) (Also, see the NEPC report on the EMOs for a revealing look at the breadth of this industry.)

The Gates Foundation support of dubious enterprises didn't start with the Parent Empowerment bill. As Diane Ravitch recently remarked, "The Bill & Melinda Gates Foundation puts up the money to ensure that ["Waiting for Superman"] this morality tale of good reformers and bad teachers is shown to state legislatures, to civic groups, to people living in housing projects. The movie itself is financed in part by an evangelical billionaire (Philip Anschutz) who contributes heavily to libertarian and ultra-conservative causes."

The Shoe Button Complex in Arizona

Jan Brewer, Republican governor of Arizona and famous for issuing a tongue wagging to President Obama, appointed Intel ex-CEO Craig Barrett to chair a council—Ready Arizona--to study and recommend public education reform for the state. It is unclear what Barrett knows about education. One suspects that we are encountering another case of the Shoe Button Complex. Barrett is urging businesses to push school reform. His public utterances strike familiar chords: the future of the entire state rests on the test scores of little kids; more science and math majors will attract businesses to the state; it’s a global economy. After all, the public schools are “suppliers” of labor for businesses. And at Intel, “if a supplier didn’t meet our specifications, we would call the supplier and say, ‘Meet our specifications or we will fire you.’” Apparently, Barrett shares his fellow Republican Mitt Romney’s pleasure in firing people.

Of course, what Barrett is actually and unknowingly talking about is crony capitalism: Linking government and business in relationships that favor the economy. Whether the intellectual, moral, physical, and aesthetic well-being of young people is benefited by their education probably never occasions to Barrett and his ilk. Or perhaps "well-being" to Barrett means having acquired a taste for consumerism and a job to support it. In fact, most industry leaders would like to see specialized training pushed down as early in the curriculum as possible so that high school graduates appear in their HR departments job-ready, trained at public expense. And if training kids for Intel just happens to involve piping a bunch of online courses into Arizona public schools, well so much the better since Barrett also serves on the board of K-12 Inc., the nation’s #1 supplier of cyber-courses. Whether the former CEO of Intel knows everything there is to know about selling microprocessors AND education, or whether this is merely another manifestation of the Shoe Button Complex remains to be seen.

Gene V Glass
University of Colorado Boulder
Arizona State University