Education Secretary, Arne Duncan, and Netflix CEO, Reed Hasting, have an op-ed in today’s Wall Street Journal that starts out great but then goes dramatically downhill. They begin by recognizing the amazing potential of digital learning:
In the past two decades, technology has revolutionized the way Americans communicate, get news, socialize and conduct business. But technology has yet to transform our classrooms. At its full potential, technology could personalize and accelerate instruction for students of all educational levels. And it could provide equitable access to a world-class education for millions of students stuck attending substandard schools in cities, remote rural regions, and tribal reservations.
But then they advocate for a federal government-backed corporation to realize digital learning’s potential:
Too often, the market for educational technology has been inefficient and fragmented. The nation’s 14,000 school districts, more than a few of which have byzantine procurement systems, have been inefficient consumers and have failed to drive consistent demand. And a robust R&D base for improving and refining educational technology has been sadly lacking.
To help remedy those gaps, the Department of Education is launching a unique public-private partnership called Digital Promise.
The last thing digital learning needs is a government funded outfit to develop it. The government is particularly bad at picking technological winners and losers. And if the government pours money into Digital Promise and signals to states and districts that they should adopt what Digital Promise endorses, they will stifle a developing vibrant marketplace that will experiment with different technologies and approaches to learn what work best.
If you don’t believe me that the government is particularly incapable of picking winners and losers in technology, just look at the example of Solyndra. The government poured more than half a billion dollars of stimulus money into Solyndra’s technology for solar energy, believing that it would be the wave of the future. As it turns out, they backed a more expensive technology that failed to win in the marketplace. Solyndra recently declared bankruptcy, laying off more than 1,000 workers and blowing more than half a billion dollars of taxpayer money.
In addition to blowing taxpayer money by backing the wrong technology, Digital Promise is the digital learning equivalent of mandating Betamax. If we privilege the wrong technology we will crowd out better solutions and productive innovation.
Giving taxpayer money to certain outfits also runs the risk of corruption, since political connections may well influence which company and technologies get backed. This leads to Crony Capitalism, or crapitalism.
For the sake of digital learning, Mr. Secretary, please stop “helping” it with a government backed organization, like Digital Promise.
(Correction: Digital Promise is a Non-Profit Organization, but all the points still apply)
Jay P. Greene's Blog 
Think how effective Netflix would be if run by the govt.
How does a very smart guy like Hastings get his name on something like this? Does it make him feel better at cocktail parties?
“The government is particularly bad at picking technological winners and losers.”
What is “the government” in this assertion? Also, you have heard of the Pentagon haven’t you?
Don’t you tire of saying things that have no basis?
I will concur that hybrid risk machines such as proposed here are anathema to democracy–the public bears the risk and the private corporation sees the profits. I’d rather you had your way than they have theirs. Though yours won’t do any better without strict a merciless penalties in place for fraud and failure (besides simply “going out of business”).
“The government”, in this case, is the political process and individuals have been raiding the treasury and getting special considerations since there were governments. There’s the basis.
As for “strict a merciless penalties”, they used to shoot criminals of various types in authoritarian regimes for various economic transgressions and that didn’t stop those economic transgressions. Oh, and how likely do you think punishment is to follow when the business in question enjoys a cozy relationship with the politically powerful?
Lastly, yeah, Jay’s way, the free market, is better since without the protection of the politically powerful, and no more in the way of strict and merciless penalties then currently exist, fraud artists require fleetness of foot to stay ahead of the minions of the law and the reputation they emit. Some people will do that, most won’t.
The Pentagon? You mean those guys who spend hundreds of billions on weapon systems that have no practical use in today’s asymetrical theater of war. Are those the same guys who spend millions on a drone to take out two guys carrying AK-47’s. Yea, the Pentagon is who you want when you intend to blow up the world, but otherwise, their tools are a bid dated.
This Market Watch item has some relevance.
http://www.marketwatch.com/story/is-netflix-doomed-2011-09-19
If the Netflix run is threatened by advancing technology, is the federal government likely to be ahead of the curve on digital learning?
As for Mr. Storm, check out the Netflix share price if you wish to see a “penalty.”
@George: strict and merciless penalties for fraud…ie, serious and extended jail time.
Regrading your point about the Pentagon:
1) The Pentagon isn’t actually highly efficient at picking winners and losers, precisely because the special limitations and barriers to entry involved in defense work prevent the emergence of a flourishing marketplace of providers.
2) That said, at least the Pentagon doesn’t pick a single company and do everything through them, which obviously leads directly to poor performance and corruption. It makes some attempt to bid jobs out to multiple providers. It’s a very messy and imperfect process, but it beats “here’s my campaign donor, you must buy everything from him” hands down.
Ya that government is nothing compared to the private sector. Lets get Enron or Worldcom or Chrysler or AIG or Wall St in general to run the gov’t.
Oooops.
It’s hard to talk to you guys as you have no interest in really discussing things. You serve a particular interest, that’s all.
The Pentagon is, primarily, THE venture capitalist in the world. If not for Pentagon funding we would not have the techno gadgets the markets love so much to waste our lives with.
You guys talk talk talk, but without public funds amassed to serve a social contract there would ONLY be monopoly capital. Maybe you’d get a good gig there, but if not, you’ll be pulling turnips like the rest of us.