Financialization Created Chicago Public Schools’ Fiscal Crisis

Chicago Public Schools (CPS) is in a deep and enduring fiscal crisis. After decades of budget cuts, Chicago’s public K–12 schools have been hollowed out, magnifying the hardships of stagnant wages, rising housing prices, and more faced by the city’s working class. Local pundits have predictably blamed CPS’s fiscal crisis on either the greedy teachers’ union (Republicans’ and a few austerity-minded Democrats’ scapegoat) or on conservative suburban and rural “downstate” politicians in Illinois hostile to urban children’s plight (most Democrats’ scapegoat).

But Chicago is a one-party city, controlled by the Democrats, in a solidly blue state, where Democrats usually control the state government. In reality, CPS’s endless fiscal crises and austerity are consequences of a ruling-class project to chip away at Chicago public education. This has involved a two-pronged strategy of school-choice policies and education financialization carried out by successive Democratic mayors with the backing and active encouragement of key elements of Chicago capital. School-choice policies seek to remake public education in the image of a competitive market, where schools compete for education consumers (children and their parents). Education financialization is the expanded role of financial instruments, actors, and markets in public education’s operations.

Together, these policies have reconfigured Chicago Public Schools’ operations. The district’s funding streams now function as a rent extraction machine, channeling revenue out of the CPS classrooms that serve black, brown, and immigrant working-class neighborhoods and into the pockets of Wall Street.

Public K–12 education has many uses. It provides hard and soft skills in preparation for the labor force; socialization in civic, cultural, and political norms; acts as de facto childcare centers for younger children, reducing the cost of living for parents. Radicals and reformers have demanded tuition-free public education since the late eighteenth century. Universally accessible, tuition-free, public, K–12 education contributes to the social wage, the mix of publicly provided goods and services that add to the normative standard of living. Universal access to tuition-free public K–12 education was rolled out alongside other New Deal reforms of the 1930s and ’40s — taxing the rich, the expansion of unions, and regulation of finance and industry — associated with the Keynesian period in the development of US capitalism.

By the 1970s, the…

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