Neil Kraus, "The Fantasy Economy: Neoliberalism, Inequality, and the Education Reform Movement" (Temple UP, 2023)
Apr 16, 2025
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Neil Kraus, a Political Science professor at the University of Wisconsin, explores the urgent themes of his book, 'The Fantasy Economy.' He critiques the long-standing belief that education is the sole pathway to economic opportunity, arguing this notion perpetuates wage stagnation and inequality. Kraus emphasizes that the education system is misrepresented by corporate interests, revealing the chaotic interplay between neoliberal policies and educational reform. He advocates for understanding education as a social necessity, aiming for a paradigm shift away from the flawed narratives surrounding the current economic landscape.
Neil Kraus argues that the portrayal of education as the sole solution to economic opportunity misrepresents the deeper issues of systemic inequality.
The human capital theory fosters a misguided belief that educational improvements alone can resolve economic challenges, masking broader market dynamics.
Kraus advocates for redefining education as a social necessity and emphasizes the need for an equitable, well-funded public education system to combat inequality.
Deep dives
The Myth of the Fantasy Economy
The concept of the 'fantasy economy' challenges the prevailing belief that education is the singular solution to economic opportunity and success. This narrative, intensified during the Reagan era, falsely links educational attainment to job prospects and economic results, promoting the idea that an inadequately educated workforce is the root cause of poverty and inequality. Neil Krauss posits that the real issues stem from corporate interests and neoliberal policies that reshape the discourse around education, effectively sidelining systemic economic factors. By understanding this fantasy, it becomes clear that educational reform alone cannot rectify the deeper economic injustices woven into society.
Human Capital Theory: A Flawed Foundation
Human capital theory, which attributes an individual's income solely to their education and skills, has perpetuated the belief that improving educational credentials can solve economic inequality. Krauss argues that this theory has dominated elite discourse, turning the focus away from the realities of wage stagnation and job insecurity tied to market dynamics rather than educational deficits. The persistent assertion that individuals simply need to attain higher qualifications to secure better jobs fails to consider the broader labor market, where many highly educated individuals find themselves underemployed. This disconnect results in the public's frustration towards educational institutions rather than addressing the failings of the economic system itself.
The Role of Accountability in Education
The educational accountability movement, epitomized by initiatives like No Child Left Behind, reflects a fundamental shift towards standardization that undermines diverse learning experiences. It emphasizes testing and achievement gaps, fostering a culture of blame on schools while ignoring the systemic barriers that contribute to educational inequalities. This movement has become a tool for implementing further neoliberal reforms that prioritize market-driven solutions over collaborative educational practices. Consequently, teachers are left battling against external pressures and a narrow definition of success that diminishes the educational landscape.
Charter Schools and the School Choice Movement
The rise of charter schools and vouchers is closely tied to the myth of the failing education system, where the narrative suggests that privatization and competition will lead to better outcomes for students. Krauss explains that this narrative serves the interests of those promoting neoliberal policies, fostering a perception that public schools are inadequate. However, research indicates that many charter initiatives have not produced substantial improvements and often exacerbate existing inequalities. The marketing of these alternatives frequently obscures their potential downsides, leading to a public response that is often based on fear rather than factual outcomes.
The Future of Education and Economic Opportunity
Krauss emphasizes the critical need to reconceptualize education as a social necessity rather than merely a tool for economic advancement. He advocates for a well-funded public education system that prioritizes holistic learning and equity over narrow economic metrics. The ongoing conversations surrounding affordability and access, particularly in higher education, signal a public desire for transformation rather than superficial reforms. By addressing the systemic issues that underpin economic inequality, society can work towards creating a more equitable landscape where education serves as a true catalyst for opportunity.
Kraus claims the idea that both the education system and labor force are chronically deficient was aggressively and incorrectly promoted starting in the Reagan era, when corporate interests and education reformers emphasized education as the exclusive mechanism providing the citizenry with economic opportunity. However, as this critical book reveals, that is a misleading articulation of the economy and education system rooted in the economic self-interests of corporations and the wealthy.
The Fantasy Economy challenges the basic assumptions of the education reform movement of the last few decades. Kraus insists that education cannot control the labor market and unreliable corporate narratives fuel this misinformation. Moreover, misguided public policies, such as accountability and school choice, along with an emphasis on workforce development and STEM over broad-based liberal arts education, have only produced greater inequality.
Ultimately, The Fantasy Economy argues that education should be understood as a social necessity, not an engine of the neoliberal agenda. Kraus' book advocates for a change in conventional thinking about economic opportunity and the purpose of education in a democracy.
Neil Kraus is Professor of Political Science at the University of Wisconsin, River Falls. He is the author of Majoritarian Cities: Policy Making and Inequality in Urban Politics and Race, Neighborhoods, and Community Power: Buffalo Politics, 1934-1997.
