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Understanding the multiple nuances of critical literacy requires an understanding of the complexity of the construct of literacy. The term literacy has multiple meanings, depending on context and purpose of the definition. A common definition of literacy refers to the ability to read and write. The ability to read and write encompasses both decoding symbols (in the case of reading) and encoding symbols (in the case of writing). However, reading and writing go beyond decoding and encoding; to be literate also implies that one must be able to interpret written language to give meaning to what is read and written.

Literacy has different connotations depending on context. In school settings, it may refer to how well students decode and interpret text. From a political perspective, national and state legislation requires that all students be tested to demonstrate achievement for all children, and considerable funding has been allocated to provide instruction and materials to improve student achievement as measured by standardized tests. From an economic perspective, employers are calling for graduates who can enter the workforce as literate workers. Regardless of the context, universal literacy is widely accepted as a goal, and considerable resources are expended to support the attainment of that goal.

Some persons view literacy through a continuum of developing skills and evaluate the acquisition of those skills against a defined set of expectations that determine whether a person is literate or illiterate. Those expectations are often defined by the skills that a person needs to contribute to a society as a citizen and a worker, so it seems obvious that standards and expectations for literacy in the 21st century are different from standards and expectations of literacy in the 17th century. Furthermore, literacy in an industrialized nation might be construed differently from literacy in a developing nation. Some educators, such as E. D. Hirsch, William Bennett, and Diane Ravitch, have suggested that a common understanding of a nation's cultural literacy is essential for members of a society to attain high levels of literacy. From this viewpoint, literacy is viewed as a neutral construct, with commonly accepted notions of what constitutes literacy. Furthermore, teachers in schools accept a construction of literacy that is defined by standards of what children should know, and they deliver curriculum that is designed to help children meet those standards as assessed by high-stakes tests.

One perspective of critical literacy relates to the definition of literacy as interpretation of text. That is, critical literacy refers to using language in all forms to solve problems, to engage in complex thinking, and to communicate. The knowledge economy of the 21st century requires that persons engage in critical thinking through critical literacy. Text is a primary context for critical literacy in that a person engages in constructing and deconstructing meaning from multiple perspectives. As new media have become prevalent in a global economy, literacy and critical literacy are often noted in the plural as literacies. A common thread woven through this picture of literacy and critical literacy is that the current political, social, and economic order is unquestioned. Literacy, and to a lesser extent, critical literacy, serves to perpetuate the current order.

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