A reader responded to a post about Michigan with the following comment.
I perked up because I was reminded of something I heard on CNN recently. Fareed Zakaria was interviewing Steven Rattner about hedge funds, equity investors, and outsourcing. Zakaria asked why so many capital investors end up sending jobs overseas, and Rattner answered very concisely. He said, and I paraphrase, “in a global economy, capital always seeks to lower costs. In a competitive marketplace, if you can’t cut costs, you go out of business. The name of the game is who can cut costs the most.”
What does this mean in an education marketplace? The school that can lower its costs the most wins. How do you lower costs? You increase class size and/or hire the least experienced, low-cost teachers.
So, the “winner” is the school with the largest class sizes and the least experienced teachers.
But these are not the factors associated with quality education. This would not describe the education at our nation’s elite schools, like Sidwell Friends, where the Obama daughters are enrolled, or at Exeter or Groton or Deerfield Academy, where so many of the corporate reformers send their children.
|Snyder’s proposal to improve education by maximizing parental choice implicitly rests on the Adam-Smith-”invisible-hand” doctrine — that is, in a free market, the sellers who offer the best product will survive while the sellers who offer inferior products will fail.However, the invisible hand only works when the market works. As commenters have noted in responses to recent posts in Diane’s blog, there are major market failures in the school-choice marketplace, particularly in the low-SES/inner-city areas.Most buyers (parents) have little/no accurate information regarding the quality of competing schools and no practical way of obtaining accurate information.Similarly, many/most buyers (parents) do not know what mix of educational services would best serve their particular children’s education needs — i.e., strict vs. relaxed discipline, whole-language vs. phonics reading instruction, 1 well-paid experienced teacher or 2 poorly-paid inexperienced teachers/class; lots of computerized instruction vs. minimal computerized instruction.For even the most concerned, well-educated parents, the school choice decision would be largely a crapshoot and would probably be driven by factors unrelated to school quality — i.e., neighborhood rumors, where the children’s friends are going, ease of transportation.And, in low-SES areas (the only areas where we’re seriously concerned that school quality is too low), many of the parents will be relatively unconcerned with the school choice decision and virtually none of the parents will be well-educated. So, the school choice decisions of most parents in these areas will be entirely a crapshoot with the result that, in these areas, there is no reason to believe that Adam Smith’s invisible hand will operate — that is, there is no reason to believe that the schools chosen by the parents will be the schools that offer the best product.
For these reasons, under Snyder’s proposal, there is a strong incentive for a school to minimize operating costs and little incentive for a school to improve instructional quality, particularly in low-SES areas. We’ll see an explosion of low-cost, low-quality for-profit schools serving the low-SES areas providing an inferior educational product while making a high profit margin.