Arrighi's still at Binghamton, right?
maybe he's talking about the widely discussed book about the US education system by a former teacher, JOhn Taylor Gatto. An excerpt was published in Harper's recently. Parts of it were also widely-touted among rightwingers because he's critical of the public education system. He makes something like this claim, here, http://www.johntaylorgatto.com/chapters/3j.htm -- that literacy has actually declined over the last century.
IIRC, though, it doesn't seem like the National Literacy Survey stats bear this claim out.
kelley