The distinguished education researcher Gene Glass reads this blog and occasionally comments. Yesterday I quoted a short statement by Margaret Raymond, director of CREDO, the Walton-funded evaluator of charter schools, who stated publicly that markets don’t work well in schooling. We can speculate on why markets don’t work: parents don’t have enough information, information is distorted by marketing and propaganda, test scores are the wrong information, etc. If you believe that society has a fundamental obligation to provide good schools for all children, the market is the worst delivery mechanism because it exacerbates inequity. The one thing the market can never do is produce equality of educational opportunity.
Gene Glass responded to the post with this comment:
Wikipedia describes Kenneth Ewart Boulding as “… an economist, educator, peace activist, poet, religious mystic, devoted Quaker, systems scientist, and interdisciplinary philosopher. “ Indeed, Ken Boulding was all of those things and many more. At the University of Michigan in the 1950-60s, he founded the General Systems society with Ludwig von Bertalanffy. Born in Liverpool in 1910, he was educated at Oxford (Masters degree).
His textbook, Economic Analysis (1941) was virtually the introduction to Keynesianism to American academics. He never obtained a doctorate, though surely he never felt the want of one due to the many honorary doctorates he received. In his long career, he served as president of the Amer. Econ. Assoc. and the AAAS, among other organizations. He died in Boulder in 1993.
I was very lucky to be situated at the University of Colorado when Boulding left Michigan in 1967 to join the Economic Department at Boulder. I had joined the faculty there in 1966. Within a few years the word spread that this new fellow in Economics was someone to listen to. Twice, in the early 1970s, I sat through his undergraduate course in General Systems. The undergraduates had no idea how lucky they were; I was enthralled. Boulding was a Liverpudlian, and that coupled with a pronounced stammer made listening to him lecture extremely demanding. But somehow the effort produced greater concentration. I can recall so many of the things he said though more than 40 years have passed. “”The invention of the correlation coefficient was the greatest disaster of the 19th century, for it permitted the subtitution of arithmetic for thinking.”
From 1969 through 1971, I was editing the Review of Educational Research for the American Educational Research Association (AERA). In the office, I enjoyed a few small privileges in connection with the 1971 Annual Meeting. For one, I could invite a speaker to address the assembled conventioneers. I invited Boulding. An expanded version of his talk was published in the Review of Educational Research (Vol. 42, No. 1, 1972, pp. 129-143). I have never read anything else by an economist addressing schooling that equals it.
Here is the merest sampling of what he wrote:
Schools may be financed directly out of school taxes, in which case the school system itself is the taxing authority and there is no intermediary, or they may be financed by grants from other taxing authorities, such as states or cities. In any case, the persons who receive the product-whether this is knowledge, skill, custodial care, or certification-are not the people who pay for it. This divorce between the recipient of the product and the payer of the bills is perhaps the major element in the peculiar situation of the industry that may lead to pathological results. (pp. 134-135)
Boulding originated the notion of the “grants economy” in which A grants a payment to B who delivers a service or product to C. Of course, this turned on its head the paradigm used by most economists, who imagine C paying B for services or products. When Boulding referred to this grants economy underlying schooling as leading to “pathological results,” he was referring to the fact that the schooling industry is “not normal,” i.e. does not follow the course of classical economic models. In the years ensuing since Boulding’s early forays into this notion, the grants economy has become increasingly important to understanding a nation’s economy.
Boulding was considered a bit of a rebel. David Latzko wrote of Boulding that “The narrow bounds of the economics discipline could not contain his interests and talents.” Perhaps this accounts for why many traditional economists have not followed him where reality leads. Perhaps this is why Dr. Margaret Raymond could pronounce so recently that “And it’s the only industry/sector [schooling]where the market mechanism just doesn’t work.” In fact, the “market mechanism” fails to work in many sectors.
But back to Dr. Raymond. Margaret Raymond is the head of the Hoover Institution’s Center for Research on Educational Outcomes. As key researcher in charge of the first big CREDO study of charter schools that dropped on the charter school lobby with a big thud: charter schools no better than old fashion public schools, some good, some really bad. And then more recently, CREDO under Raymond’s direction conducted a study of charter schools in Ohio, a locale that has known its problems attempting to keep charter schools out of the newspapers and their operators out of jail. What did this second CREDO charter school study find? Charter schools in Ohio are a mess.
All of this bad news for the charter school folks caused Dr. Raymond to go before the Cleveland Club and confess thusly:
“This is one of the big insights for me. I actually am kind of a pro-market kinda girl. But it doesn’t seem to work in a choice environment for education. I’ve studied competitive markets for much of my career. That’s my academic focus for my work. And it’s the only industry/sector [schooling] where the market mechanism just doesn’t work.”
Of course, it is positively absurd to think that schooling is the only “industry” in which free markets just don’t work. And Dr. Raymond didn’t give up entirely on the free market ideology for education — she would probably have to find a professional home outside the Hoover Institution if she did. She went on to tell the Cleveland Club that more transparency and information for parents will probably do the trick.
Frankly parents have not been really well educated in the mechanisms of choice.… I think the policy environment really needs to focus on creating much more information and transparency about performance than we’ve had for the 20 years of the charter school movement.
So parents just aren’t smart enough to be trusted to make choices in a free market of schooling, and they need more information, like test scores, I presume. I’ll leave Dr. Raymond at this point, and recommend that she and her associates at the Hoover Institution spend a little more time with Kenneth Boulding’s writings.
Wow! I just learned something entirely new. Now I have to ruminate and reread to make it stick. The grants economy is a new idea for me, and for people who have to describe everything in terms of an economy (aka economists), I think it would add much to their own understanding if they paid attention to Boulding.
Some universities have a so called “grant millionaires’ club” whose members obtained grants worth over a million dollars. Professors are valued (and evaluated) based on how much grant money they bring in to the university.
My son’s PhD mentor finally left the university system. He got a little tired of just of bringing in grants, which ate up the majority of his time. I think he would have liked to be able to do more research and teaching, but he was more valuable as a money making machine as far as the university was concerned.
Thanks to Gene Glass for posting his comment and thanks to you, Diane, for sharing it. Now I’m interested to get and read Boulding’s The World as a Total System, covering:
What Systems Can We Perceive in the World?
The World as a Physical System
The World as a Biological System
The World as a Social System
The World as an Economic System
The World as a Political System
The World as a Communication System
The World as an Evaluative System
The notion of the World as a Social System grabs my attention, in particular. Thanks to Deming, I think of our educational systems mostly as social systems that can only be improved rather than ever “fixed” as if they were Newtonian clockworks.
I have long felt that because I studied engineering my education was so focused on math and science that it was incomplete. Your blog with these profound insights on the economy, pedagogy and philosophy by outstanding minds like Eugene Glass are a treasure to me. The idea of a “grants economy” shines a new light on the disconnect between markets and human services for me. I just never thought of it in those terms.
I do not see the difference between billionairs’ economy and grants’ economy. Aren’t they the same idea: influence policy, research, education through injecting money to the right places so that growth occurs there and death results everywhere else?
I think you have to think of it as it applies to a community allocating its resources to agencies under its umbrella rather than the too often reality in other venues. Public schools may lobby for their budget, but ideally the schools’ goals are in line with community goals, which serve a common good. No one is enriched by the transactions. Same with the fire department, police, public works, library,…
The “more information for the parents” shtick is precisely the reason why we have astroturf parent groups, like Oakland Reach, and Memphis Lift, led and funded by billionaires like the Waltons. They are handed that test score messaging and are instructed to treat it like gospel, and that it will save the kids from all neighborhood school badness. And voila! Outcomes will magically improve, and while they are distracted, their own neighborhood school is closed (the one full of kids and parents who chose it) and a charter pops up in its place. Then, the portfolio model supporters point and say, oh, look, they chose a charter. It must be a good “quality” school. But when those same parents chose their neighborhood district school, then they chose a “bad” school and must be educated about that. if that’s the kind of market success Dr. Raymond is talking about, she needs to stop.
Well said.
One can only hope that the coming decade brings about the further and hasty discrediting of school charter/privatization schemes.
To that end, I just placed my order for Diane’s new book, coming out soon: “Slaying Goliath”. I’ve been meaning to put in my order and I consider the book a good luck charm so to speak for the coming new year.
If only the Untied States could more fully jettison the idea of applying a business model to a decidedly non-business endeavor (since public schools are nurturing and educating children -not mass producing widgets.) It’s not just the concept of charter schools that stinks.
One of the foul side effects of the Trump era has been the glorification among some folks of the stench-ridden notion of putting a dollar sign on anything and everything. Dollars as well as data rule the day it sometimes seems. That’s shallow, stupid and ethically wrong.
Of course, business leaders have been whining about public schools for a long,long time. And, the history of anti-intellectualism goes WAY back in the U.S.
All I can say is, try calling any corporation or even many local businesses these days and see how long it takes you to reach an actual human being to ask a question. (I had a health care “provider” that never even gave that option. I got tangled up in a seemingly jungle-like, endless phone tree. )
Then, try calling any public school and see how soon a real life person is on the line with you and how quickly those teachers, staff and administrators respond, especially when a parent calls.
To quote Joni Mitchell from 50 years ago, “Don’t it always seem to go, That you don’t know what you’ve got,’Till it’s gone”.
Yeah. Like public schools. And, democracy.
Of course, some of the wealthiest would love to preserve that sort of “human touch” -but only for themselves and their children. For the rest of us, well, they might as well blow some of their famous “grit” right in our faces and tell us to suck it up…just work harder and breath less.
Hmmm, well, we’ll soon see what the 2020s has in store for them…and the rest of us!
Enjoy these last days of this crazy decade.
John O Here is an article about the problem of getting the run-around with customer service that you refer to in your note–it’s become systematic:
https://theconversation.com/why-bad-customer-service-wont-improve-anytime-soon-128671?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20December%2019%202019%20-%201493414196&utm_content=Latest%20from%20The%20Conversation%20for%20December%2019%202019%20-%201493414196+Version+B+CID_0693d35a19b95f90d4a2e394b9fc5e41&utm_source=campaign_monitor_us&utm_term=Why%20bad%20customer%20service%20wont%20improve%20anytime%20soon
Wow, the discrimination aspect is crazy. Thanks for the link.
John O: You’re welcome. The systematizing of customer neglect, however, has to be approached (attacked?) at the policy level. If we elect people who have a “for sale” sign stamped on their foreheads, we’re sunk.
Paraphrased but famous line from that Matt Damon movie about life insurance fraud: Do you remember when you sold out? CBK
“One of the foul side effects of the Trump era has been the glorification among some folks of the stench-ridden notion of putting a dollar sign on anything and everything.”
My first principal, who became a central office figure more than twenty years ago, complained of the business model influences on his job even then. Perhaps Trump is the logical result of that type of thinking rather than the cause. I certainly see how you see him as an exaggeration of the matter.
There’s a top-down type of business mentality that is the antithesis of what academic inquiry and free thinking are meant to represent. Sucking up is another way to put it. Aka Kiss up and kick down.
Of course, this sort of thing can lead to disaster in business -and life. For example, the current Boeing debacle.
John O Yes–the fundamental problem is the inherent limits that capitalistic culture, as a mindset, places on the raising of questions and on adapting a fuller view of what constitutes the common good, the most pressing to date: our environment: plastics, errant chemicals, and global warming. CBK
controlling the debate boundaries
ciedie Yes, “controlling the debate boundaries.” And therein lies the call in a democracy for a high level of public awareness and maturity–a skepticism that is not extreme nor completely pessimistic; but that neither believes naively nor accepts a low level of what constitutes the good that we can achieve “. . . if we can keep it.” CBK
In a market economy, the quality and price of a service is supposed to be affected by competition. I appreciate noting that since the city and state pay for schools to function, families that receive the service pay for it indirectly. It’s not a direct market. It also must be recognized that teachers, nurses, firefighters, etc. are motivated by rewards much deeper than cutthroat financial ones. Those rewards are not test scores, either. The “market” simply does not and cannot have any effect whatsoever on what takes place in my classroom from day to day. Facts will be ignored, though. Unfortunately, since the Hoover Institute is not a real research university, facts will be ignored so that the drive to profit from society-harming privatization can continue. Stanford is just as much asleep at the wheel as is Betsy DeVos.
Thank you for this post from Gene Glass.
I did not have the benefit of Kenneth Boulding’s thinking beyond a small volume titled “The Image: Knowledge in Life and Society” published in 1956 and another paper in 1966, titled “The Economics of the Coming Spaceship Earth,” the latter anticipating the consequences for the planet if “economists continue to think and act as if production, consumption, throughput, and the GNP were the sufficient and adequate measure of economic success.”
These two publications (and others from that era) fueled my interest in various “imaginaries” beyond those authorized in then conventional art history, criticism, aesthetic theories and theories about human perception and learning.
Science, Boulding wrote: might “be defined as the process of substituting unimportant questions which can be answered for important questions which cannot.”
In the mid 1960s, I had the good fortunate of studying with some scholars in education who were also questioning traditions of “scientific” (statistical) research as if those methods of inquiry were above reproach and the end-all for understanding. They are not, but the quants won out in federal policy formation. Sad.
Thanks for the recommendations, Laura, for the delightful quotation from Boulding (ooo, I have some applications of that), and for these insights into your original, interesting habits of thought. Would love to hear more about those “imaginaries.”
I find economic arguments strange in this arena. Consider a small town with a single high school. How much competition could there be? Suppose an entrepreneur comes to town and opens up a competing high school. Some of the students go to one of the schools some to the other. There are not enough in either school to support the school’s running, so both schools fold their tents.
Here’s the problem. Markets are places for competition. Schools are not. Period. We do not want our schools competing with one another (except in after school sports) and we do not want our students competing with one another within the schools.
Competition creates winners and losers. We do not want any of our children to fail at a basic education, so we collaborate, we do not compete. If a school is weak we work to make it stronger, we don’t invite a competitor into our neighborhood.
This, btw, is what is wrong with the current concept of “charter schools.” The original conception was to have a school within a school district operating under different (basically temporary) rules to explore innovations which then get shared out to other schools. Current charter schools are offering themselves up as competitors, nor collaborators and hence are an abomination. (Stop saying there are good charter school! Yes, some are successful, but so what?)
“Suppose an entrepreneur comes to town and opens up a competing high school. Some of the students go to one of the schools some to the other.”
Suppose an entrepreneur comes to town and opens up a competing high school and picks and chooses the least expensive to educate students and throws back any student who needs more teaching than an inexperienced teacher knowing only one way to teach provides. Which includes all students with special needs. Then the entrepreneur demands more money from that public school to reward them for teaching “the exact same kids” but better, and takes even more money from those public schools while throwing back even more vulnerable kids and crowing about their 99% success rates.
The entrepreneur would get very rich because the most vulnerable children have less.
That’s what charters have always been about. Not about providing a “competing” school but about enriching the greediest people by skimming off the profitable children as long as they remain profitable.
Those greedy people tend to convince themselves that their rewards are coming from doing good — by identifying those worthy of being taught and eliminating those unworthy of being taught and banishing them from sight, they believe their rewards are rightly forthcoming. What happens to the kids they believe are unworthy is not their concern because to them, a child’s value lies entirely in the profit and acclaim they bring to charter operators. Children that do not bring profit are not valued. That is the ethical and moral compass of those who promote charters who claim that as long as a few benefit, the many who suffer should not be mentioned because they do not matter.
That is why markets don’t work. Because while charter folks believe that the kids who are not profitable to teach do not matter and should rot for all they care, public schools are about believing that ALL students matter. That is something that charter supporters who believe only SOME kids matter will never grasp because their hearts are far smaller than their greed. And it will always be more profitable to teach only the kids who are profitable to teach than to teach all kids. Which is why it is shocking that people who supposedly have phDs are promoting something that a kid taking Econ 101 learns about how markets and public goods work.
Amazon now has its own delivery service. When they have a delivery in a rural area, they use the US Post Office. If the Post Office were not an option, these rural folks would not have a way to get service. Our current health care system with out of control costs is market based. As a result, there is a severe shortage of doctors and hospitals in rural America. If we ever get Medicare for All, the government will look at the need, not the profit, and rural residents will get better access to healthcare. Markets create many “losers.”
Such an important point. It’s disingenuous to use the term “free” to refer to markets that large numbers of people can’t participate in–like the “markets” for dental services and healthcare generally in the Disunited States.
A market is not “free” when it depends on government subsidy
Yes–to the point of the post! That too!
Deformers love to talk about charters and vouchers as free market solutions because the reality is that what they refer to as “free markets” are ones that allow them to get their paws around them.
Bob The most practical of capitalist principles: If the government, who is supposed to work for the good of all, doesn’t do what you think is good for all, but especially for you, then BUY IT.
This BTW is the answer to the earlier question here about a GRANTS ECONOMY. It may do the intelligent and good thing at times; but it’s also a structural set-up that can too-easily hide a nasty wolf in really-nice sheep’s clothing. CBK
So much depends on who is doing the granting, doesn’t it? Beware of Plutocrats bearing gifts. Very, very different from a grant from the Commons to those serving the Commons.
Bob Yes. Even the worst plutocrat-fascist can do real good–the point rests in the conditional: IF it happens to suit them in the moment, for whatever arbitrary reason. If not, too bad–I have the power.
This is where, in history, we finally distinguished between the principle of law and the principle of bloodline . . . and, later, with the rise of the fascist personality unhooked now from law, reason, and the principles of intelligence-excellence. It’s the huge but often-overlooked distinction between (a) kingship/dictatorship and (b) a lawful civil society.
Capitalist-autocrats might not know it, but on their present track of diminishing democracy, instead of supporting it, they are slipping fast into the spiritual swamp of fascism. CBK
Bob and anyone interested: This NEWS ALERT just in from the Washington Post. I found it interesting, especially when read in the light of our recent discussion of the cannibal-like overreaches of capitalism and the capitalist mindset.
“Giuliani is said to have taken part in a 2018 call with Venezuela’s president as part of a shadow effort to ease him from power.
“President Trump’s lawyer, Rudolph W. Giuliani, participated in a September 2018 phone call with Venezuelan President Nicolás Maduro, part of a shadow diplomatic effort, backed in part by private interests, that was aimed at engineering a negotiated exit to ease him from power and reopen resource-rich Venezuela to business, according to people familiar with the endeavor.
“The phone conversation provides yet another example of how Giuliani used his private role to insert himself into foreign diplomacy, alarming administration officials confused about whose interests he was representing.”
Read more »
https://www.washingtonpost.com/politics/trumps-lawyer-and-the-venezuelan-president-how-giuliani-got-involved-in-back-channel-talks-with-maduro/2019/12/29/289dc6aa-235f-11ea-86f3-3b5019d451db_story.html?utm_campaign=news_alert_revere&utm_medium=email&utm_source=alert&wpisrc=al_news__alert-politics–alert-national&wpmk=1
CBK: Get the spelling right! It’s Ghouliani. LOL.
Nixon also pulled stunts like this. Going around his own intelligence services and using private gangsters to conduct policy. https://bobshepherdonline.wordpress.com/2019/12/28/rudolph-the-brown-nosed-ghouliani-bob-shepherd/
Breathtaking, CBK. And disgusting. Thank you.
The notion of a grant economy is an old one. It is found, for example, in the notion among indigenous people that people don’t own land but are allowed to borrow it a time, for their use, from the Commons.
Diane One could write a book in response to G. Glass’ note, about both education and economics. Abouteconomics, I would like to refer him to another relatively obscure but brilliant philosopher, Bernard Lonergan, who wrote the below work on “Macroeconomic Dynamics.”
On education, I bring forward this statement from his note regarding earlier CREDO research: ” . . . charter schools no better than old fashion public schools, some good, some really bad;” then their later study findings where Ohio charter schools were “a mess.”
I have not read the CREDO reports; however, I like to presume that Margaret Raymond, and others at the Hoover Institution’s Center for Research on Educational Outcomes, understand how the basic structure of charter schools–as distinct from public schools–invites, even promotes, those “messy” problems that are scarce if not absent from public institutions, and how dangerous to democracy they are.
That “mess” that Glass speaks of too-often flows from deeper roots that merely this-or-that classroom experience–the unremarkable but hugely influential absence of institutional structures and long-time, set-in-place policies, guides, and people connected directly with public service in a democracy: as Idea #1 (small-d).
At that deeper level (that we expect all parents to fully understand?), those publicly-oriented structures serve to systematically quash the free-reign of greed and fraudulence that is all-too-commonly associated with unregulated private enterprise (think of Flint MI, Boeing, Big Pharma, Big Tobacco, Big Oil, we could go on-and-on); e.g., self-dealing, misdirecting and absconding with (public) funds, tribalism/ nepotism, outright theft and a general carelessness about, or even contempt for, their customers’ well-being, and those they “serve.”
In education, if the choice is between qualified children’s education and the owners’, funders’, or stockholders’ bank accounts, guess what? . . . It’s the old and recalcitrant problem of trying to serve two masters. The problem is that, with public institutions, public service is structured-in and surrounded by supporting policy; whereas with private or quasi-private institutions, public-service is absent or structured-out. There, even government regulation (presumably still working on the part of public interest) is constantly railed against, even hated, and/or “bought-out.”
The worst of it for reformers and charter-supporters, then, is the growth of powerful lobbies that, systematically and over long periods of time (cited on this site), denigrate all-things-public-education (including teachers); so that the whole idea of public schools and teachers is smeared, and where charters and the truly Orwellian use of “choice” can grow without the oversight of those actually involved with the OTHER idea of public service and interest–in this case, the qualified education of all children.
In my experience, and embarrassingly, we have many teacher who have no idea about the difference between public service in a democracy and working in a business enterprise.
Further, the Hoover Institution is interested in “outcomes.” Here, in the end, through local, state, and federal government powers, the outcome
is this: parents will be left with a choice between what’s left of a dead body of public education, OR one quasi-private charter school over another–none are good choices. I have to ask at this point: What hand do the funders of the Hoover Institution (the Walton’s) have in this scenario?
Then there is the broader problem of curriculum choices. To put it way too briefly, in our public schools, students and teachers can explore political systems, do comparative analyses, including on our own, and with all the warps and weaves associated with any system (also including oligarchy).
Whereas how does private enterprise or even non-profit boards take to criticism? or the Waltons, the Kochs or the Gates, of their own enterprises? And what would put or keep them in an authentic dialogue about the basic structure of their influence? How goes the idea that we can bite the hand that feeds us and not suffer for it?
So the problem is rich, but not whether some charter schools do well educating students or not, in Ohio or in any State–I’m sure some do well, regardless of their political or economic roots. And having not read the CREDO reports, those who wrote it may understand this difference.
Rather, the problem goes much deeper–to those same political and economic, even spiritual roots. The problem is in those who influence or make policy (1) failing to see the GREAT DIFFERENCE between business enterprises and public institutions–this is probably what Margaret Raymond tripped on when she remarked: “markets don’t work well in schooling.” (I wonder what the Waltons thought about that?)
. . . OR (2) in those who are fundamentally against public- or democratic (small d) anything, and who have the resources to import their personal viewpoints (often egregiously narrow and under-educated) on the entire world, all with the cover-story of “doing good.” If it’s not fascism we are involved in, if left to its own unchecked devices, fascism is on it’s way.
Finally, parents need to be further educated, indeed; but also we need to be able to trust our policy-makers to know the basics–though public institutions live in a capitalist economy, they are not about economics or capitalism. We are about educating people to choose to live in, maintain, and grow in thinking democratic culture. We need to be able to trust our representatives AND our HOOVER-TYPE institutions, to know and to truly work in the public interest instead of shooting-the-feet out from under the democratic and public institutions that their own freedoms depend on. CBK
Macroeconomic Dynamics: An Essay in Circulation Analysis, Volume 15, By Bernard Lonergan Edited by Patrick H. Byrne and Frederick G. Lawrence, © 1999
https://utorontopress.com/us/books/by-series/collected-works-of-bernard-lonergan
CBK,
Sorry your comments were stuck in moderation. I’m on vacation and not online as much as usual.
Thank you, Diane. I hope you and yours are having a wonderful holiday season. We all here so-appreciate you and your dedication. CBK
So well said: “If you believe that society has a fundamental obligation to provide good schools for all children, the market is the worst delivery mechanism because it exacerbates inequity. “
Thanks to Gene Glass for posting his comment and thanks to you, Diane, for sharing it. Now I’m interested to get and read Boulding’s The World as a Total System, covering:
What Systems Can We Perceive in the World?
The World as a Physical System
The World as a Biological System
The World as a Social System
The World as an Economic System
The World as a Political System
The World as a Communication System
The World as an Evaluative System
The notion of the World as a Social System grabs my attention, in particular. Thanks to Deming, I think of our educational systems mostly as social systems that can only be improved rather than ever “fixed” as if they were Newtonian clockworks.
I have taught in public schools for 23 years, 22 of them inside of a mental health facility. For 15 of those years the mental health facility was given a very large grant and was the only game in town for a mid sized city. They did an amazing job. Students were given such wonderful therapy and other services. Employees were paid well and staid at their jobs. Accordingly, students or clients to them, had experienced therapists and counselors. Not everything was perfect, but it was very good. Then, about 8 years ago the business model came into play. The mayor thought that there needed to be competition to provide better services. So the mental health facility lost its grant and had to compete with several other new providers in town. This was good for no one. The students (clients) lost experienced therapists and counselors because now that cost was a factor the provider hired younger inexperienced staff. All hours had to be accounted for, so many of the amazing experiences the students had went away, because they were not billable therapy hours.The new providers in town were not doing any better than this provider who had been in town for many years. This provider is now losing many youth clients and adult clients to the University mental health system, which is now able to do a better job than the for profit model. It has been so sad to see the decline of such an amazing program. This past year I finally left the mental health facility and now teach with my same at-risk program but in a school facility. I am so much happier, because I now work where students have enough staff to help them with their needs. At the mental health facility they had cut staff back so much that the needs of the students were not being met.
In conclusion education isn’t the only sector that fails when the for profit business model is applied.
Thank you for this. There are many, many situations in which these market models fail miserably. Highways. Fire-fighting. Healthcare. Education. But there’s a certain type of person, driven only by personal gain, who will never grok these arguments. Free markets are entities in a theology.
Sasha. This was a really pertainent story. Thanks.
Bob: your comment about Free Markets (upper case on purpose) being a theology was interesting. Adam Smith actually wrote his first major work, The Theory of Moral Sentiments, as a sort of religious approach to ethics in society. At Glascow, Smith taught “Moral Philosophy”, a topic that must have been pretty much what he wanted to talk about.
It has always struck me that he had his eye on two mouse holes. Like Jonathan Edwards, whose writings reflect in many ways the enlightenment ideas he read, Smith seems grounded in his religion and in the enlightenment quest for the description of the machine that makes things go. While Tertulian may have had problems understanding what Athens had to do with Jerusalem, enlightenment thinkers drew on the Newtonian tradition of trying to unite everything. Smith seems much the utopian to me.
Especially where he expects markets to morally self-regulate, Smith seems to neglect the admonition the power corrupts, and to ignore the obvious fact that money creates power. I lay this to his experience growing up before Thomas Gregg and similar industrialists began to amass great wealth in his textile business. He seems almost naive to me, perhaps because I am not deeply into his thinking the way some are.
The advent of massive capital as a necessity of industry made many of Smith’s observations in Moral Sentiments seem a sort of nostalgic glance into a past that was really a long way past. The relationships that he saw in the business world were mostly among equals. Dishonesty could be rooted out in this world. If you acquired a reputation of being derelict in your financial duty, no one would do business with you. There is much truth to this even today. Where powerful forces exist on equal footing, some people may find themselves outside the trusted realm (like Trump experienced when he had to borrow money from international sources?”). When one or another financial entity becomes too large, however, this force stops working. Montesquieu’s concept, that power is the check on power, is the overriding concept at work here. When one financial entity becomes too powerful, it’s will must be imposed on all around it, for what human organization will abide leadership that purposely decreases its power?
Government being the natural process of the relationship between large groups of people, it stands as the only entity that can assure ethical behavior. Business can look to self-regulating markets as a natural process that prevents large investments in policing, but it can never claim it is not government. These self-regulating entities do well in parts, perhaps most parts, of our economic relationships in society. My cousin the tractor dealer would not last a month if all the farmers started telling one another that that place of business is corrupt or does not give the customer good value. A mechanic who does not fix things is soon a ditch digger.
The problem Adam Smith did not anticipate was that businesses became large. Many became so large that they took up most of a market share. And they became intricate. No consumer could ever know enough chemistry to determine, for example, that a particular chemical would do what it was intended to do. To balance the power our economy grants to makers of steel, fuels, and drugs, we must find an entity equally strong. Without is, the imbalance of power in the system creates a sort of business ascendancy that mimics the old Empires of the world, constantly seeking to expand or die.
This was not intended to be a long post, but it sort of got away from me. Sorry.
A wonderful post, RT! Don’t apologize. Thank you!
RT I, for one, enjoyed reading your post. CBK
Thanks so much for your post. Competition is not the answer in social services or any area in which the health and well being of people are the objective.
“She went on to tell the Cleveland Club that more transparency and information for parents will probably do the trick.”
What trick? Fooling parents into thinking, it’s school choice that’s missing from their lives?
“In fact, the “market mechanism” fails to work in many sectors.”
I dunno what exactly they mean by “market mechanism”, but if they mean competition, it’s difficult to find human sectors where it works well as a main driving force. In fact, competition, in general, is harmful in every sector where quantification doesn’t describe the sector’s activity faithfully.
We have a sort of relativity theory working: a human sector or activity’s success is described differently by different observers. For example, for moneymen, the more money a hospital brings in the better, while patients rarely seek out the richest hospitals or doctors.
Moneymen cannot help but talk about universities’ big donations and they even consider this as a crucial part of ranking universities, while students rarely say “my university is fantastic because it gets an enormous amount money from donors and hence we have the highest paid president and football coach in the country.”
Mate I had to laugh–it’s too, too true. CBK
Competition in youth sports is highly detrimental.
And even at the pro level, it produces cheating like the Tom Brady deflation scandal and all the steroid use and blood doping.
SomeDam I have been involved in youth soccer for decades, first with my son, and then with my grandchildren, and on several levels.
FYI, the good that is “called out” to all concerned far outreaches any of the negative forces that are, after all, human in nature and will be present anyway in ANY human endeavor. In youth sports, as with any of those endeavors, it’s up to the persons involved to bring their better angels to the games, and to appeal to those same angels in others through their policies and practices. In my experience, in most cases, they do. There is so much good learning done–I never cease to be amazed at it.
At the end of the last game I attended, besides the teams’ common practice of filing past the other players touching hands as they go, no matter who won, the coaches had the teams line up in the center of the field and face and APPLAUD the parents and other family members on the sidelines as a thank-you-for-your-support gesture. There is more “hidden curriculum” going on in youth sports and its competition than you can shake a stick at.
But again, not all human endeavors call for the use of competitive principles, and some are antithetical to it–like health and education.
In any case, both the good and the bad, and all in-between, are always potential. It’s US who are charged to implement and manifest either–and competitive sports is no exception to that inherent rule.
Keep up your good work. CBK
Competition works in sports.
People who love their work do not do it because of competition.
I have my doubts about it even there. Baryshnikov said, “I do not try to dance better than anyone else. I only try to dance better than myself.” I would like to see this precept applied to most sporting activities. The fact that people use metaphors related to violence and war (“Kill ’em! We slaughtered ’em! We took them down, eh?”) to describe sports competitions between arbitrary granfaloons (our team) brought together by rich people’s money is telling. And instructive to the next generation of cannon fodder.
And such an important point!!! People who love their work do not do it because of competition!!! Yes, yes, yes.
This is why merit pay doesn’t work. It’s why the carrot and stick of high-stakes testing wouldn’t work even if the tests were valid. For nonphysical tasks, external incentives are actually DEMOTIVATING. They carry the message, “This is so onerous that I have to bribe you to do it.”
Bob Yes–and in many cases, it’s existential. Power is difficult to let go of–think of letting your teenager go to live their own life–and in the case of teaching, it’s from My Control in a SYSTEM, . . . to a true democracy of spirit. But really, Bob, how can we make money on THAT? CBK
I so enjoy your comments, Catherine! Thank you! But–oh, wait–I’m having difficulty figuring out how I can monetize them, so, on second thought, they aren’t important because they won’t help me to enter among the Elect. I’d better get back to working on my new software for the standardized testing of children to determine their eugenic worthiness.
Bob . . . so much for church mice. CBK
LOL!!!!
“competition works in sports”.
But “the market” does not work in sports.
The NBA and NFL and MLB could simply let the market rule but they do not. They understand the problems with the richest teams being able to offer the richest contracts to an unlimited number of players right out of high school or college. The richest team could simply offer high contracts to all the top players just to keep them out of the hands of other teams.
But that is not allowed. Instead there are all sorts of rules and regulations that specifically prohibit a “free market” in major league sports. Because any “competition” would become meaningless.
Even college sports have the NCAA to prevent a free market in where college athletes can play.
Ed reformers don’t really want a “free market” because they would have to address what happens to the children with serious disabilities and other issues who no school can make a profit by teaching. They don’t want to admit that their free market only works if those children disappear forever and it seems as if ed reformer’s most rewarded charter schools are run by the kind of people who deep down believe that only the children they designate as worthy are worthy of teaching and the rest can rot for all they care.
Ed reformers want the kind of free market where those in power make the rules that benefit some teams and the other teams are left to “compete” with the students who the ed reformers wish would disappear from their sight forever so their rich benefactors have more.
There was a wonderful story today in some article in the New York Times (I think it was) that goes like this: An elderly, orthodox Rabbi was finally convinced by his friend to go watch a soccer match. After a while, the Rabbi said to his friend, “I think I have solved your problem.”
“Oh, how’s that?” said the friend.
“Give a ball to both sides. Then, they don’t have to fight over it.”
Diane The truth of competition manifests in events (from centuries ago) like the Olympics–where everyone strives to be and do the best, and that best is given honor by all. Such competition (when not corrupted) is where we honor high human achievement.
Whereas capitalism/business, as we have come to know it, has become predatory, aiming to destroy the competitor and to own the entire playing field–not exactly a manifestation of deserved honor for high achievement. For business, competition is talked about as some sort of god, but then those who are involved in it do their best to do away with what is good (for all) about it.
That’s only one “ballpark,” however. The other is where human well-being is worked out–family, health, development and education, the general environment (including political and spiritual), and providing a place where the creative human spirit can thrive. Doing that well is not driven by principles of competition but of maturity, responsibility and love–as that young Russian talks about on another thread here.
Capitalism is an economic system. It is intimate with but IS NOT A POLITICAL SYSTEM. But when capitalism is thought of as equivalent to a political system and even a “culture” (e.g., of corrupt competition), then what is in the second paragraph above becomes irrelevant, then fades away, then dies on the trash heap of “not profitable.” CBK
My comment about competition awaits in moderation. What am I doing wrong? CBK
This is so random, CBK. Happens all the time with WordPress. Suddenly it will start doing this to you. Then it will stop.