Reading, Rockets and ‘Rithmetic (Ep. 9)

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Space shuttle Discovery sits at Kennedy Space Center earlier this year awaiting its last scheduled launch in November 2010 as the program winds down. (Photo by Joe Raedle/Getty Images)

Reading, Rockets, and ‘Rithmetic: When is the federal government not like the federal government? When it launches a Race to the Top.

Our latest Freakonomics Radio podcast looks into the Race to the Top education-reform program. (You can subscribe at iTunes, get it by RSS feed, read the transcript, or listen live via the box above.) We argue that the U.S. Department of Education is acting a bit more like a venture capitalist than we’re used to — and that that’s probably a good thing.

Race to the Top is awarding $4 billion in prize money to state education departments to reward reform but also to seed further innovation. It thrives on two elements that government bureaucracies don’t usually employ: competition and experimentation.

Arne Duncan Arne Duncan

So we ask Arne Duncan, the Secretary of Education, where the idea came from — and whether it was a tough sell, and what kind of results he’s seen so far.

You’ll also hear from some private-sector folks who paved the way for Race to the Top. One of them is Craig Nevill-Manning, an engineering director at Google New York. He’ll tell the story of one of Google’s most interesting (though not widely known) practices called “20 percent time,” and how it led to Google breakthroughs that might otherwise have lain unborn. You may even be typing into one of them right now.

As interesting as Nevill-Manning and Duncan are, the star of the episode is Peter Diamandis. As a kid, all he wanted to do was go into space. Things looked promising: he was born in 1961, just as NASA was flexing its considerable muscles. But as Diamandis aged, so did NASA, and it became less ambitious. He realized that relying on the government to push forward with space travel was a losing bet.

So he decided to do something about it. Inspired by the Orteig Prize, whose $25,000 tempted Charles Lindbergh to fly across the Atlantic Ocean, Diamandis founded the X Prize. Its initial offering: a $10 million prize for the first private team who could build and launch a vehicle that could carry three people to 100 kilometers above the earth. And then do it again, within two weeks. It worked.

DESCRIPTIONRic Francis/Associated Press Bob Weiss, Larry Page, Peter Diamandis and Buzz Aldrin at a ceremony for the Google Lunar X Prize.

That was in 2004. Just last month came the second X Prize: three teams who split another $10 million for building safe, reliable cars capable of traveling 100 miles on a gallon of gasoline, or gas-equivalent energy. The car prize money was put up by Progressive Insurance, the space-travel prize by the Ansari family.

The X Prize Foundation is not alone. According to a recent McKinsey & Co. report called “And the Winner Is …,” more than 60 prizes of at least $100,000 have been launched since 2000, representing nearly $250 million in prize money. Furthermore:

Before 1991, 97% of the value of the big-prize purses that we analyzed was dedicated to awards that recognize prior achievement, such as the Nobel and Pulitzer Prizes. But since 1991, 78% of new prize money in this data set has been dedicated to inducement-style prizes that focus on achieving a specific, future goal.

As Peter Diamandis sees it, most big institutions just aren’t inclined toward major-league innovation:

In a government situation, if you tried a bold, crazy idea and it blew up in your face, there’d be a Congressional investigation. In a large corporation, if you did that, there’d be a stock price plummeting. So, really, crazy ideas are in the purview of small companies, entrepreneurs who are willing to risk everything to make their dream come true, literally their lives, their fortunes. And we’ve seen that in our X Prizes where people have mortgaged their homes, or lost their marriages, or risked their lives.”

So this style of innovation may not be for the faint of heart. But in a world where problem-solving is often an exercise in political charades and hyperbolic idiocy, we say: bring on the bold, crazy ideas! And if the government wants to get involved, all the better. (Granted, it’s a bit easier to hold big competitive experiments when you can raise $4 billion in prize money just by dipping into the tax coffers.)

As with any experimentation, there will be lots of failures. (See you at the Congressional investigations!) But if the X Prize, Google and Charles Lindbergh are any indication, Race to the Top at least has a chance of helping a few million schoolkids learn how to fly.


I happen to like the idea of creating competitons in school and creating an incentive for the kids to "think outside the box", and think of new solutions to problems and come up with new ideas. However, I do see many things that don't really match up to me. To me, this seems like the government is using them as tests or as experiments to get new ideas.
Also, the education in the US is not very good in the world rankings. So why dont they use that money to improve the education instead of just make competitions (that can create interesting and bright ideas, but HOW will that improve their education??)
And finally, isnt the US in a bad economic time right now? Were are they getting $4 billion dollars from and wasting it in this? Dont they have other more important things to pay for, than a competition for kids??


Government investing on schools to create things, interesting. This will increase the supply of talented people and creative since they are more willing to pay and have more resources to create any invention they have in mind. Maybe the government is doing this because they see a strand of lazy people so they have a demand from talented people on the future. Now the government should think this before doing it because investing lots of money on something that will not give the expected product is called a waste of money wereas the government might use it for health care. Will this increase taxes on school tuitions or what? Were do they get this surplus amount of money to spend it on this idea?


I completely disagree with this idea. In my opinion, motivating students with simply money is not the right way to do things. If students follow this path, nothing but money will encourage them to achieve their goals in life. Essentially, if a competition is created were the price is 100,000, the marginal cost for the kids would be loosing a whole lot of time into the project and perhaps risking their grades in classes to drop. The marginal benefit, on the other hand, is having the the chance to win 100,000 dollars which you will compete for with many other competitors. The way I see it, the cost outweighs the benefits thus making this a bad idea.

Regarding the 4 billion dollars the government is investing in this system, are they planning to increase income taxes and maybe cut government spending on some other matters in order to get this money?

A solution that might work however, is investing this money in affordable houses for parents and finding them stable jobs. The wealthier the parents, the better neighbor hoods they can live in. As a result, there will be better public schools in these locations therefore increasing the overall education of the parent's children.


Stacy Haines

Race to the Top is just the latest in a long line of misguided and ill-researched attempts to improve student performance. There is only one factor that can improve student learning: good teaching. Instead, this program, like most of the others before it, focuses on "teaching to the test", rather than promoting higher-order thinking.


Race to the Bottom has essentially, given the tanked economy and desperate school systems, caused school and state leaders to cast intellect and conscience to the wind and neglect reason in order to "win" some of this pirated pot of gold. Pirated, because it is indeed tax-payer funds garnished via Department of Education (thanks to misguided members of Congress), and then the funds are "awarded" back to those states and school systems that have coughed up their dignity by offering sacrifices to the Duncan diety et al.

This business model of government is all about money. School reform could happen without such money laundering. Charter school investors watch as their porfolios grow fat, testing conglomerates salivate, business ed school pop up (i.e. new Bush schools) and eagerly await administrator wannabes ready to be brainwashed, charlatan school chancellors are appointed by well-connected mayors (virtually assigned via pumped campaign funds from elite with an agenda), etc. Yes they are ready, eager, and waiting for the profits to grow as millions of dollars of contracts are awarded to the "right" people and companies. Furthermore, grant monies from the Dept. of Education will flow freely to the well suited, that is, to those entities that have been converted to this new business model. Buzz words, buzz driven, standardized tests scores, reform, status quo, ..... Watch for the sting.

Remember competition can spur good and evil. Reform, sure, but not this way. People, hold on to your elected school boards - democracy not tyranny!


jane black

I constantly hear the cry that standardized testing teaches students how to pass the test, not the curricula. This may very well be.

However, I wonder if teaching students to pass the test might be better than what we appear to be teaching them now: how to put in the minimum amount of effort and still pass.

Yes, standardized tests have little educational merit, but they can demonstrate that students *know* something, even if it is only how to pass that test. Currently, I'm not sure if we have anything that proves to people that students know something.

Race to the Top (which is probably flawed) demands some level of accountability. Perhaps we should hold students accountable (for a change) by telling them it is their responsibility to pass that test; their teachers are there to help them pass a standardized test.

Right now, teachers have responsibility but no power. Race to the Top will only work if students either take some responsibility for themselves and if educators are empowered to fail the students who haven't mastered the material.

If we do, in fact, change the education funding model for colleges to completion rates, the number of students who pass will skyrocket, regardless of whether they know anything.

C'mon, Duncan, take a real risk: Stand by the teachers who give Fs. Don't simply encourage them to give As for nothing to prove they are at the top. That's how we ended up here.



Wow, what a bunch of bureaucrats who responded! I cringe when I see all the "can't do"s. This blather is what is making America stupid - no competition, unfair, we can't afford it (so we CAN afford stupidity?), it is only publicity, etc. etc. Haitch76 wants to subsidize parents so they can have a bigger house, yeah, that will help the kids! As if we as a country have not already overinvested in houses.

It makes me sick.


Acting like venture capitalists -- a good thing?! It's undoubtedly a horrible and stupid thing! Children are only seven one year in their lives. A decision to close down a school or radically overhaul a curriculum can have a terrible impact on student learning. (My son's elementary school issued a moratorium on spelling for seven years! There's an entire cohort of kids with appalling spelling skills -- not to mention a poorer vocabulary and no understanding of the etymology of words!)

Parents of children in public schools in urban areas have suffered the vicissitudes of these idiotic, self-important reformers for the better part of this decade. The results have been mediocre at best and in many formerly well-performing schools whose students are not from horribly dysfunctional backgrounds, the impact of the reformers has been disastrous. What might be a necessary approach to help children performing below grade level to achieve is usually the wrong approach for average or above average students.

Some areas of human endeavor (and one could argue all areas, but that's another discussion) are not suited to b-school models for increasing productivity and output. News flash to the would-be reformers: You weren't the only ones who did well in school or made high SAT scores. In fact, you probably didn't do all that well despite the Ivy imprimatur, which is why you're over-compensating by leading education "reform."

No one here in the real world is fooled by your pronouncements. We see where the money is going. It's not making it into classrooms, but it is larding the pockets of test prep publishers and software companies devising ever more Orwellian ways to monitor and control public school children.

The upside for the reformers? Very few kids will have read Orwell.



Sigh. Race to the Top is crap. Every single person working in education knows this. Few school districts are even paying any attention to it.

I know that all sounds really snazzy to the business minded people out there, but this model only benefits the schools in the position to compete. By your logic the X prize would have persuaded all of us to start building rocket ships in our backyards. Of course we didn't - only the people with the resources and the necessary skills did.

Also our public school aren't all bad - only the poor ones. In fact, when you take out the poor schools, American students do as well or better than most other developed countries. Unfortunately, we refuse to give a damn about the lower socioeconomic status in our country. Until we decide to actually fix the underlying problems of entrenched poverty and high income inequality, we will continue to reap the social problems that result.

I'm so sick of people who know absolutely nothing about the education system (aside from what they read in the paper) pretending that they have the magic bullet solution. There are few other areas where people who have never even worked in the field somehow feel entitled to have expert opinions.



The education reform debate is dominated by efforts to make high-poverty schools work better, but a recent report suggests that a more promising strategy involves providing low-income families a chance to live in more-advantaged neighborhoods, where their children can attend low-poverty public schools.

So all that "talk" about leveling the playing field is window dressing when we trap children in low-opportunity areas.


Pay down the debt first.

Or raise taxes to pay for the extra expenses.


Oh, and the state I live in won one of those prizes. The state, however, is very near the worst in the United States and has an absolutely wretched public high school system.

Somebody got took, and I think it was the taxpayers.


Race to the Top is anti-union. Let's get that out of the way first. Anybody who says, as comment #14 does, that "race to the top is nothing more then vote buying, paying off teachers unions in sympathetic districts" is confused and ignorant, bringing up anti-union rhetoric out of habit even when it's wildly misplaced.

I think Race to the Top is a good idea gone horribly wrong. No Child Left Behind didn't have the impact it could have (thankfully) because it was never funded. Race to the Top is, by design, not fully funded. It says, "Make these changes and MAYBE you'll be one of the lucky states that gets the funds." There aren't enough funds to go around, and they don't pretend that there are. Duncan and Obama are just dangling cash in front of cash-starved states' faces, bringing about change without necessarily HAVING to pay for it.

And that could be a good thing... if it weren't for the fact that all the changes Duncan and Obama are demanding from states have been tried. Some don't work. Some actually make things worse. But they're popular, and everybody likes buzzwords like "merit pay" and "charter schools" even though merit pay is one of the things that doesn't help, and charter schools are one of the things that makes education worse.

It's too bad. I hoped for better when I voted for Obama, and Race to the Top is really a pretty decent way to force the maximum change for the buck. With good ideas behind it, it could have done some good. It's just too bad that Duncan is so incompetent that he loaded it with counterproductive ideas instead.



In theory, giving schools an opportunity to develop competitive innovations sounds like a great idea. But in reality, it is terribly flawed. The process of even applying for funding is so cumbersome and daunting that many needy, creative schools just don't have the resources to put together an application. The program is set up so that only schools that have already demonstrated some success with their "innovation" might get the funding to continue it. Schools that are truly struggling and NEED that extra support don't stand a chance. Small schools that don't have extra people on staff to write grants and teachers/administrators already spread too thin are out of the running right off the bat.


Are schools the source and solution to the general problem of educational underachievement? In a high tech society it is undoubtedly essential to provide students with high tech skills that can only be taught in well funded schools. This will certainly solve a large part of the problem. But what if the fundamental issues are cultural, not technical or financial? Education teaches how to prosper in a society of your peers. But who are your peers? For many of the disadvantaged, the cultural skill set for success among their peers may be different than for those in more affluent circles. Questions of class structure, the persistence of cultural differences among social classes, and the potential requirement for disadvantaged students to break through cultural barriers must be addressed. Can a program such as Race to the Top do that?


Ashley (comment #29) and Jane Black (comment #26) have a better handle on the situation than Dubner or Duncan. Perhaps one of them should be doing this podcast and the other should be Secretary of Education.

Punishing teachers for results they have little control of (since teachers can't make kids do their work or study, and most teachers aren't even allowed to fail the kids when they don't) makes little sense. It brings a warm feeling to the hearts of small-minded people who didn't do well in school and still want revenge on their teachers decades later, but it doesn't improve student achievement. Put in a position where they may lose their job or earn a bonus based on results they have little power to honestly control, teachers, like any human being would, do one of two things: they cheat, or they look for ways to massage the results that are not quite cheating. Either test prep crowds out actual teaching, or groups of students that will score poorly "accidentally" don't take the test.

We can keep blaming the teachers, as we've been doing, and keep getting the results we've been getting. Or we can treat the teachers like professionals (which the vast majority of them deserve) and let them do their job. We can accept that if a kid gets an "F" on his report card, that definitely reflects on the kid, but may or may not reflect on the teacher. A few years with a policy of supporting the teachers, and our education system will stack up against any in the world. The reason it may not now is more because of "reformers" like Arne Duncan than because of poor teaching.



I see a lot of good comments from people like Ashley, Amy, fw, and eceresa, and a lot of ignorance from people who don't have a firm grasp on the whole process of educational reform, teaching, urban/suburban and class differences, culture, etc.

I've been a teacher for over 6 years now. I've worked at learning centers, parochial school, public school, urban charter school, test prep companies, and tutored privately. I've taught rich and poor, black and white and latino and asian and male and female. I got my masters in education, and for the last 6 years or so have been trying to whittle away the bunkum and get to the heart of what matters in education. Here's what I've found, and how I see RTTT affecting it.

1) Most teachers are doing a good job. Some are doing a great job. Some are doing an awful job. The awful provide facts, the good provide instruction, the great provide opportunity and let the kids develop facts, instruct themselves, and make connections. The great ones don't require more money, nor do most of the good ones. If D.C. has told us anything about the results of throwing money at a problem, it's that it's not the answer when it comes to education (RTTT -1)

2) School/community culture MATTERS. If you are in a place where the culture reinforces that it is okay, accepted, protected and ENCOURAGED that you work and learn AND if that culture is supported by the larger community, the level of education will rise. I've seen it in urban and suburban areas, rich and poor. The latter usually accomplishes the task using charter schools, primarily because they're often started by educators who realized their school was doing it wrong, and wanted to do it right. The RTTT money will most likely go to those already-achieving schools. Will it inspire others to do better? Probably not. I know teachers, and the vast majority can be very touchy when they feel as if someone is pointing the finger at them while praising another school or other teachers' efforts. If administrators try to change it, that usually causes even more resistance. So the dirty fact is that a lot of teachers are petty, but they likely wouldn't have changed even with the money. (RTTT - 1)

3) Family MATTERS. I started my career in high-performing districts where there were affluence everywhere and the parents understood the importance of education. Most kids succeeded. The ones that didn't were almost always the ones from broken homes, divorced parents, neglectful parents, etc. The success in poorer schools came from parents who were involved, together, loving. I'm not overly moralistic, but I've seen it time and time again, so I can't just ignore it. RTTT will not be able to provide a stable, loving family life for kids. (RTTT -1)

4) Standardized tests aren't the best way to measure student achievement; frankly, they give such a limited scope of a student's cognitive abilities, that they'd be done away with if they weren't the most efficient way to measure and compare the vast number of students we have attending school in this country. Some of them have merit, though, and do test on the skills AND APPLICATION THEREOF that most students need to know to get to college/get a good job. Without going into the debate on whether education's primary focus should be job training or self improvement (spoiler: answer B), if we're all up on getting kids prepared for "the real world" then standardized tests are a (Note: A) reasonably effective method of comparison. I would like to see standardized tests be more amenable to the specific cultural differences between social groups in this country (SES, race, gender, etc.) not to the point where it's patronizing or pandering, but to the point where questions deal with more than the white, middle-class life experiences. RTTT may have merit here, so: (RTTT +1)

In the end, RTTT doesn't pan out as an effective solution to the problems of education. Venture Capitalism can be an excellent way of motivating people to action, but there has been enough exploration of carrot and stick on this blog that anyone keeping up should know that it doesn't work for everything, and education is one of those things. There is no one solution to education, just as there's no one solution to health care. There has to be a shift in thinking, in culture, in training, in assessment, and in policy before the educational system will be where it should be in this country. Of course, if the general populace was amenable to finding multi-faceted, long-term solutions to problems, we wouldn't be in this mess in the first place.



Where DID Google's 20% time come from? 3M has had a policy of 15% time for decades! Resulting in literally thousands of new products. Listen, I like Google they're a great company, but they didn't invent innovation. Dig a little deeper next time.

Warren Applegate

I'm not a teacher,but have been a volunteer coach at high schools ranging from inner city to Jesuit pro schools?

The best performing schools have the most involved parents.
Remove the kids who disrupt classes, so that those who want to learn can do so.
Teachers should actually major in a subject they'll teach, not be Educattion school graduate.
I think at about 15 we need to have students be put on two paths: 1) prep school type academic requirements, or 2) vocational training.

Darrell Denlinger

Nobody has thought about the obvious ethical problems with the government "awarding prize money". Where does the money come from? It comes from my pocket and from all those states that don't win. So we are going to take money from those states that need the most improvement and give it to states that have scored high on metrics of this program. Robin Hood in reverse. Not a single mention of this from Freakonomics. They are totally in the tank on this.