A reader comments that schools are “a business” but that their ultimate goal–unlike a business–is not profit, but education:
|Education is — and must be — a “business”. Schools are a business — they have employees, labor costs, capital costs, and budgets. Schools are a subset of businesses — the service subset; that is, schools provide a service rather than a product. In these respects, schools are like Verizon or Citibank. And, like Verizon and Citibank, any assessment of whether a school is succesful involves consideration of the costs incurred.The critical difference between schools and what we commonly think of as a business — Verizon or Citibank — is that the ultimate purpose of the schools is to provide the service (educate the children) while, for the conventional service business such as Verizon or Citibank, the provision of the service is simply a means to the ultimate purpose of making a profit for the business’ owners.
Given the differences in ultimate purpose, it’s unlikely that schools operated by for-profit entities will — over the long run — provide a better service (education) than schools operated by not-for-profit entities (including the local school systems). Arguably, the profit motive coupled with fewer govt regulations/political burdens might allow some for-profit entities to operate schools more efficiently/provide better education than the not-for-profit entities. But, in the long run, the profit motive must ultimately force the for-profit entities to sacrifice service quality to achieve higher profits. This is particularly true in low-SES/inner-city neighborhoods where many parents will be too dysfunctional/poorly-informed to make rational/informed school choices, thereby greatly weakening the “invisible hand” effect that theoretically channels customers to the competitors offering the best product.
The better approach is for school reformers to identify and eliminate the inefficiencies/counter-productive govt regulations in the not-for-profit schools (particularly the public schools).