Q and A: Overstock.com Founder Patrick Byrne

Published November 1, 2008

This summer, Patrick Byrne, chairman and CEO of Overstock.com, Inc., was elected co-chairman of the board of the Friedman Foundation for Educational Choice, an advocacy group based in Indianapolis. Byrne has founded 19 schools around the world that have served more than 7,000 children since 2005.

Domestically, he has funded private school scholarships for low-income families in Utah since 2005 and was the primary supporter of Utah’s Referendum One in 2007, a campaign for the state to become the first in the nation to enact a universal school voucher program. In addition, in 2005 he founded First Class Education, an effort to empower teachers by driving more dollars directly into the classroom. Byrne recently sat down with School Reform News reporter Jillian Metz to discuss the future of education.

Jillian Metz: As the new co-chair of the Friedman Foundation, where do you think the greatest potential lies for school choice in the United States? How will you contribute to helping the movement reach more of its potential?

Patrick Byrne: Great opportunities exist in the South. There are political dynamics in the Southern region that create fertile soil, because education is an issue among African-Americans and Hispanics that is driving them away from the teachers union-owned wing of the Democratic Party.

Milton Friedman always said a socialist product could do two of the three following things: Be expensive, be low in quality, and harm the poor. Education in the United States is pulling the trifecta. The people who are bearing the brunt of this right now are minorities, who are becoming increasingly vocal in their desire for school choice.

There is also new support, which is not geographically determined, but based on budgetary pressures. Budgetary advantages of school choice will be the main drivers as we proceed, since we are heading into even more tough times economically. As states’ budgets come under pressure, legislators are going to have to see that this is an easy way to make people happy and relieve pressure on the budget.

Metz: As the November elections approach, who do you feel will deliver the change our nation needs in terms of education? Do you feel strongly about either presidential candidate?

Byrne: No, because I don’t believe the change we need will come from the federal government. In fact, the only thing we need from the federal government is for it to tiptoe backward, out the door of the classroom. I believe we need to abolish the Department of Education and move toward local control. Ultimately, all I want out of either candidate is to make sure that this is a state issue.

With that said, John McCain has come out and said he is a staunch voucher supporter. I think Barack Obama is privately pro-voucher. Obama has said we need to consider vouchers; however during the election process he cannot publicly support vouchers. After the election, I think he would come out with a moderate pro-voucher position.

Metz: What do you think is the biggest challenge we currently face in providing a higher-quality education to our nation’s children?

Byrne: The biggest stumbling block to improving education in America is the monopoly of the education guild. The monopoly is created as a combination of the teachers unions, or guild, the educrats, and the government officials all the way from the district level to the counties, as well as the state all the way up to the U.S. Department of Education. So if you take all the government officials and you add in the teachers guild, you end up with an establishment, which creates a virtual monopoly.

Metz: As you may know, Florida had a constitutional amendment on the November 4 ballot proposing 65 percent of all education funding be spent on teachers’ salaries and other classroom costs—which is a philosophy you conceived. The Florida Supreme Court pulled this off the ballot on September 3.

Byrne: I am very disappointed. Florida’s Supreme Court is very political. The state supreme court is pro-establishment and is hurting kids. The Florida Supreme Court is not concerned about law and constitutional principle; it is about defending an establishment and is against reform. In addition, the justices will root to find any principal text against reform.

Metz: As you look around the nation, which states do you feel are excelling in the school choice movement and which do you feel will be the next to offer parental choice?

Byrne: As states come under increasing budget pressures and more parents become fed up with their children’s failing education, there is really just one route to go. A lot of states are out there exploring educational opportunity methods, but you cannot predict when states will move from the actual exploring stage to the action phase because too much individual politics is involved.

Arizona is excelling, and what is nice about it is that it is so widespread. The people who take advantage of it are scattered, making it harder for a legislative board to vote it out. If any legislator were to come out against the programs, he or she would stand to lose a significant number of votes.

Louisiana is a good example of a state with a modest program that started off with 800 scholarships this year. People were lining up at 4:00 in the morning to get these scholarships with only one day’s notice about their availability.

Georgia is promising. Florida’s voucher movement had a setback with the ballot amendments, but it is not dead—especially with the bipartisan support the program receives.

There has been a lot of work done to lay the groundwork for choice in the state of South Carolina over the past five years or so. There has been a significant amount of educating the general public about school choice, and as we have found in other states, the more education and awareness that takes place, the more support we find for school choice.

South Carolina has had some serious educational problems and challenges, and this has helped the overall environment as well. And it does not hurt that the governor is supportive of school choice. As a result, we are optimistic that some sort of program will be enacted in the near future.

Metz: Were you surprised at the outcome of the Utah universal voucher program referendum in 2007? One might expect Utah, one of the most politically conservative states, to embrace school choice.

Byrne: Utah is politically conservative, but they do have a chord of not wanting to be seen as too different or too wacky, which caused concern with the voucher proposal.

One of the problems in the school choice movement is that everyone in America understands that education stinks, but everyone thinks their school is better than average. So we have a lot of loyalty from locals to their government schools. In particular, Republican moms are the ones who are linking arms with the guild.

Utah has a very weak governor. He sat in my living room and told me three things: He would be the “voucher governor,” vouchers will be his legacy, and the reason he was running for governor was to bring vouchers to Utah. After the voucher legislation was passed at the state level, polls came out on the referendum revealing voters were 80-20 against vouchers. I told the governor that we would have to link arms and campaign for this. His response was that “this was outside his comfort zone.”

And this is why the governor and I are not on speaking terms and I say I would vote for a Communist before I’d vote for him again.

Jillian Metz ([email protected]) writes from Florida.