Tuesday, January 15, 2008

Markets in Education

This piece by Denis Doyle, appearing in Education Week, discusses quite eloquently, what the free market impulses found in captialism can apply in the world of education. Routinely, when I discuss an education market in this space for K-12 education, I am quickly and routinely denounced as a radical bent on the destruction of a public education system.

In reality I am not in favor of destroying public education, I just want everyone to have the same options as the top ten percent of families in this nation have, a choice--a real choice, in the options for educating their children. Doyle speaks of free markets from two different perspectives.
According to the management guru Peter Drucker, there are two tributaries to classic economic theory that have a special bearing on school reform. The first is the Viennese economist Joseph Schumpeter’s elegant idea of “creative destruction.” He advanced the compelling argument that the only system that eliminates (or transforms) faltering and failing organizations is free-market capitalism. Political insulation not only props up failing institutions, it also rewards them (and, in so doing, it punishes customers). Conversely, that’s why monopolies are bad for consumers.

The second is from the 18th-century French economist Jean-Baptiste Say (who coined the term “entrepreneur”). His great insight is that in a market, supply creates its own demand. The entrepreneur (who may or may not be a risk-taker) creates a product, good, or service that no one knows they need. In modern times, the examples are countless; think of Xerox and plain-paper copies (replacing a whole industry that survives with only a symbol, “cc”), or facsimile transmission, or the personal computer, or the cellphone, or the Web. Before the fact, no one knew they needed any of these; rare is the person who can live without them today.
Doyle goes on to point out that for an entrepeneur, the possibility reward creates the energetic drive forward. But in the education system of today, there are no incentives for innovation.
As most skillful educators know, the first lesson is to keep your head down. There are neither incentives nor rewards for innovating, and there are abundant disincentives and penalties for trying. The absence of a market explains the abiding conundrum about K-12 education: its overwhelming uniformity in spite of a long tradition of local control. Educators make up the largest single group in the labor force (2 percent), employed in over 100,000 public and private schools that for all intents and purposes are identical. Indeed, the door of the typical school has never been darkened by an entrepreneur’s shadow. The reason? It would be a waste of the entrepreneur’s time and energy. Not only are there no incentives or rewards to change, there is active hostility to change.

In this one important respect, the private firm and the public school are the same: Both organizations resist change because it is often painful and always daunting. The private firm’s willingness to change is not a sign of superior virtue but of necessity. That is the power of the market: It forces change.
The truly innovative thinker is usually scorned at the outset, but almost as invariable as the sun rising in the east, his or her ideas are usually born out by the test of time.

As I have said before, education is a business--a very big business--but is rarely thought of in those terms by the people involved in the system, not the school boards, not the other policy makers, not the teachers or administrators, not the parents, and certainly not the students. Only the last group can be forgiven for their naivety. The adults in the education system would be well served by taking a page from Chris Whittle and thinking of educaiton as a business.

Only be developing a market for education and educational innovations will K-12 education attain the vibrancy of our higher education market. There is a tipping point, one that some geographical areas may be approaching, in which there are enough market choices to dramatically improve the educational lot of those of us who don't necessarily have the means to choose an appropriate school for our children.

No comments: