Single-Provider Education, Ideology, and Lunch

16 Sunday Feb 2020

Posted by pnuetz in Education, School Choice

Tags

Identity Politics, New York Times, Packed Lunches, Private education, Public School Monopoly, Scale Economies, School Choice, School Lunches, Slate, Social Justice

Advocates of public education sometimes can’t help themselves from demanding that parents abandon their own informed judgments and principles for the good of the collective. A friend sent me the links below along with his misgivings about the motives at play. These are his words:

“Here are two examples of something that drives me crazy and amounts to little more than treating my child (and me) as a [resource] to be spent for the improvement of others. The first calls for parents who pack lunches (because they are healthier and cheaper than school lunches) to stop packing and use the school hot lunch so the added scale of moths could improve foods for everybody.

The second is the same, but about attending public school instead of private – again, so that the parental force added to the public schools will help improve public schools. Never mind if public schools are actually good for you.”

The links are from the New York Times and Slate, respectively:

Why Are You Still Packing Lunch for Your Kids?

If You Send Your Kid To Private School, You Are a Bad Person

In terms of the simple economics, I’d boil these motives down to two things: a desire to achieve scale economies, which is forgivable as far as it goes; and a desire to strengthen the public education monopoly. Of course the latter brings perks for all those who participate in the management and operation of public schools, which have absorbed an ever-increasing volume of resources with little or no improvement in academic results. But the motives involve politics as well as economics. The apparent mission of the public school monopoly encompasses more than the mere provision of education. As I have discussed in more detail in an earlier post, it fosters the inculcation of collectivist values in our children. Public schools, and a few private schools catering to wealthy progressives who would say public schools are good for your kids, are hotbeds of social justice doctrine and identity politics.

Here are my friend’s closing thoughts:

“I’ve always been resistant to private school because we already pay for public [schools] and public [schools] are good enough. But lately I’ve been thinking about private school, in large part to keep [my son] away from these sorts of folks who want to use him for their own purposes…”

Those purposes can be kept in check only through school competition and parental choice. Like any creditable provider of services, schools should cater to their customers, not the other way around.

In Defense of College Admission for Pay

20 Wednesday Mar 2019

Posted by pnuetz in competition, Education, Markets, School Choice, Uncategorized

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Admission Standards, Bryan Caplan, College Admissions, competition, FBI, grade inflation, K-12 education, Non-Price Rationing, School Choice, Varsity Blues

The college admissions scandal revealed by the FBI last week exposed the willingness of some very wealthy people to lie and cheat to enhance the status of their children. It also resulted in charges against several employees of testing services and prestigious universities, who sold-out their institutions for pure financial gain. These actions may have harmed more deserving applicants to the defrauded academic institutions. Perhaps as sad, the children whose parents cheated are bound to suffer life-long consequences.

Strong prosecution of these crimes will deter other parents entertaining similarly crooked avenues in pursuit of ambitions for their kids. The schools and testing organizations should be motivated to tighten their internal governance processes. My hope, however, is that legislative bodies will refrain from passing new laws in an effort to regulate college admissions. Many schools accept a small percentage of students, legacy or otherwise, who do not meet their academic standards but whose wealthy families make substantial, above-board donations that benefit other students. Putting an abrupt end to these transactions might not be helpful to anyone.

With certain conditions, I do not object to wealthy parents wishing to pay an above-board premium to get their kids into the college of their choice, nor do I object to schools that are free to name their price. First, the school should always receive consideration in an amount adequate to benefit other students or deserving applicants. Second, the acceptance of a privileged but academically inferior student should represent an increment to the school’s freshman class, never taking a coveted slot otherwise filled by a better student. Third, an institution should never guarantee successful completion of a degree program in exchange for such an offer. Fourth, I’d like to see schools make public the number of students falling short of academic qualification whom they accept in exchange for such offers, as well as the aggregate remuneration they receive in all those cases. Fifth and finally, I see no reason why these practices should be limited to private schools. However, a public school’s remuneration must be more than sufficient to make unnecessary any taxpayer subsidies attributable to a new matriculant.

I don’t believe any of these conditions should be a matter of law. Private and public educational institutions are market participants, even if they do engage in non-price rationing. Market incentives should guide institutions to protect the integrity of their brands by awarding degrees only for real academic achievement. This bears on my third and fourth conditions above: no school can guarantee to parents that a degree will be awarded to their child without compromising its integrity. Also, a school’s academic reputation should reflect the extent to which it accepts applicants lacking the school’s minimum standards.

One of the thorniest problems with my conditions has to do with the poor academic standards that actually exist in certain degree programs. These make it possible for bad students to earn diplomas. Grade inflation is all too pervasive, and grade-point averages are notoriously high in some fields, such as education. It may be exceptionally difficult to monitor and prevent instructors from allowing poor students to skate through classes with decent grades. And too obviously and sadly, it’s often the diploma itself that matters to people as a status symbol, rather than real educational achievement. If employers are content to rely on mere signals of that kind, so much the worse.

There’s nothing to be done if that’s all that is demanded of a college education. I think that, more than anything else, is what inflames the passions of Bryan Caplan, who calls the entire system of higher education wasteful. More demanding disciplines have some immunity to this form of decay. Competitive markets might punish schools and employers having weak standards. But wherever the importance of real merit is discounted due to classist loyalties, legal impediments, professions lacking in academic rigor, or any other form of compromise, the diploma signal is paramount, and that is lamentable.

The admissions scandal has prompted howls of indignation directed not only at the cheaters ensnared by the FBI’s “Varsity Blues” operation, but more broadly at the perceived injustices of college admissions in general. The process is said to be unfair because it tolerates admissions for scions of wealthy families and even those who can pay for multiple rounds of standardized tests, multiple application fees, interview “coaches” and the like. These advantages are not unlike those endemic to any market in which ability-to-pay impinges on demand. Yet generally markets do an excellent job of facilitating the development of affordable substitutes. College education is no different, and longstanding mechanisms are in place offering means of payment for academically-qualified applicants who lack adequate resources. The conditions I listed above would enhance that support.

Nevertheless, critics say that the disadvantaged do not get adequate preparation in primary and secondary education to be competitive in college admissions. They are largely correct, but the solutions have more to do with fixing public K-12 education than the college admissions process. Primary and secondary education are almost devoid of competition and real parental choice in disadvantaged communities. There are many other social problems that aggravate the poor performance of public education in preparing students who might otherwise be candidates for higher learning. Realistically, however, the college admissions process cannot be blamed for those problems.

Inferior Schools, Venom For Reformers

28 Monday May 2018

Posted by pnuetz in Regulation, School Choice, Socialism, Uncategorized

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Betsy DeVos, charter schools, Common Core, Corey A. DeAngelis, Disparate impact, Don Boudreaux, Education Week, Educational Equity, Every Student Succeeds Act, Henry Brown, Horace Mann, John Stossel, Kevin Currie-Knight, monopoly, Nancy Thorner, No Child Left Behind Act, Public Schools, Robert P. Murphy, School Choice

We all want better K-12 education in the U.S., which has an extremely uneven — even dismal — record of student outcomes. The U.S. ranks below the OECD average in both math and science scores, despite spending 35% more per student than the OECD average. Yet there is a faction that leaps to the defense of the status quo with such viciousness that its members deride sensible reform proposals as classist and racist. Then, of course, they call for additional spending! These antics reveal their self-interest in doubling down on the status quo.

An obvious starting point for reform, and one that would save taxpayers roughly $40 billion (K-12), is to dismantle a federal education bureaucracy that adds little value to educational outcomes. Another element is expanding the set of alternatives available to parents over the way their children are educated. Betsy DeVos, President Trump’s Secretary of Education, favors both of these steps as general principles, though she lacks direct control over either, especially school choice.

Both of these steps are fiercely resisted by the public educational establishment and teachers unions. And no wonder! Who wants to lose their privileged monopoly power over a local market? The public school establishment does not wish to be troubled by demands that schools respond to competitive forces, that teachers be rewarded based on performance, or that schools should be answerable to parents and taxpayers. As for the federal role, the public school cartel seems to welcome federal money, even if it means that the feds impose control in the process.

Choice

For those skeptical of reforming public schools by allowing choice, Don Boudreaux proposed a useful thought experiment that I discussed in my earlier post “Public Monopolists Sa y Don’t Be Choosy“. It examines a hypothetical world in which supermarkets are structured like public schools. Consumers pay for their food via local taxes and must shop at one local public supermarket, and only one, at which food products are available at no additional marginal cost. However, parents are free to pay their taxes and pay for food elsewhere, at a private supermarket. Most thinking people would probably agree that this is a spectacularly bad idea. Public supermarkets would deteriorate relative to private supermarkets. Rural and inner city supermarkets would likely suffer the most. Public supermarket worker unions would lobby for higher food taxes. And of course proposals for supermarket choice would be met with hysteria. Read the earlier post for more discussion of the likely consequences.

One of the arguments often made in favor of today’s public school monopoly is that K-12 education should be regarded as a necessity, but few would take that as a compelling reason to grant government a monopoly in the retail food business. A better argument for government schools, were it strictly true, would be that education is a public good, yielding significant non-exclusive benefits to the community. And in truth there are some external benefits to society from an educated citizenry. The primary benefits of an education, however, are exclusive to the student. Kevin Currie-Knight offers an excellent treatment of the education-as-public-good question, and he concludes otherwise. And the public-good argument does not imply that parents should be denied choice in their selection of a school for their children. Ultimately, the policy question hinges on whether government schools, as currently structured, do a good job in educating students, and as Corey A. DeAngelis points out, they do not.

There is no shortage of evidence that school choice is beneficial for students and society in several respects, including academic outcomes for students and schools, racial integration, fiscal impacts, and parental satisfaction. This paper by MIT researchers found that school choice improved educational outcomes for special education students and those who were not proficient in English. This essay in Education Week, signed by nine educational researchers, emphasized the preponderance of positive findings on school choice and some additional dimensions of improvement on which they hope the education research community will focus.

The promise of choice is seldom greeted objectively by the public education establishment and its reflexive allies. To their dishonor, distortions of fact and ad hominem attacks on choice advocates are almost the rule. For example, John Stossel writes the following in “Why the Left Hates Betsy DeVos“:

“When she spoke at the Kennedy School of Government, students held up signs calling her a ‘white supremacist.’ … When she tried to visit a school, activists physically blocked her way. … The haters claim DeVos knows little about education, only got her job because she gave money to Republican politicians, and hates free public education.“

Of course, public education is not free! But it is a disgrace that someone so dedicated to the cause of improved education should be treated this way. The DeVos family has given over a billion dollars to various causes over the years, much of it to educational initiatives, and even those gifts, somehow, are seen by critics as a pretext for vilifying Betsy DeVos. But she knows much more about the poor performance of public schools than her critics care to discuss, as well as the dynamism and improvement that choice and competition can bring to education. Her critics disparage the performance of charter schools in DeVos’s home state of Michigan even while the facts show that they have performed well.

The idea that charter schools “hurt” public schools by creating educational choice is the very weakest protest a monopolist can put forward. These critics conveniently overlook the fact that most charter schools are in fact public schools! More importantly, an erstwhile monopolist must respond by adding value for consumers! If it fails to do so, it must be closed or reorganized. THAT is a good idea!

Monopoly public schools do not earn a profit in the way of monopolistic business enterprises, but remember that perhaps the greatest social costs imposed by monopolies are languid effort and a poor product. This is not to dismiss the great efforts of many teachers who toil under trying circumstances, though the current system also tends to protect bad teachers. And much of the waste in government schools is caused by bloated bureaucracy and costs imposed on teachers and schools of complying with regulation.

The Federal Bureaucracy

Another priority of Secretary DeVos is to reduce the federal role in education. Hurry, please! The unpopular Common Core standards, implemented in 2009, proved a failure. Test scores declined for student cohorts expected to benefit the most (those in the lowest percentiles). At the last link, Nancy Thorner discusses more recent legislation:

“It was in December of 2015 that Congress passed the Every Student Succeeds Act (ESSA), that replaced the often criticized No Child Left Behind Act (NCLB). ESSA, in contrast to NCLB, signified a clear move away from federally prescribed standards. In fact, ESSA expressly forbid federal regulators from attempting to ‘influence, incentivize, or coerce’ states to adopt the Common Core.”

That’s progress, but 36 states plus DC still use those standards. Curriculum mandates are only one area of federal school regulation that must be addressed. “Educational equity” is also mandated along several dimensions, requiring schools to devote a disproportionate share of resources to various subsets of students who might not benefit from the extra instructional intensity. Then there are the administrative costs of demonstrating compliance with these mandates, not to mention the virtual prohibition under these mandates of developing innovative, local solutions to the problem of educating their charges.

There is well-deserved pushback against federal control over school discipline, which requires schools to implement policies that avoid disparate impacts on certain minorities (African Americans, Latino, and special-ed children) such that they are no more likely to receive detention, suspension, or expulsion than the general student population. This is an absurdity, potentially requiring schools to go light on offenders should they happen to belong to a minority. Even worse, if the enforcement of discipline results in an observable bias in favor of any minority, it is likely to be noticed by the minority students themselves, creating a negative behavioral incentive and potentially stoking resentment among non-minority students.

In April, President Trump signed an executive order authorizing a review of federal education rules imposed on states and local school districts. Again, central regulation is costly: it involves rule-making at the federal level to interpret enabling legislation, then review by state departments of education where specific policies are designed, which are then passed down to school districts and individual schools, who must review and attempt to implement the policies, and who then must report back on their success or failure in meeting the mandates. Resources are consumed at every level. In the end, the process creates increased complexity, and the policies have proven to be of questionable value to the goal of good education. While spending on education has soared over the past 30 years, student achievement has remained static, and the same disparities of outcome remain.

Secular Statism

Robert P. Murphy provides a brief history of U.S. public schooling. It is a fascinating take on the history of secularization of education in America. It is the story of the substitution of state for private institutions, including family and church, in the development and socialization of children. Murphy offers a telling quote:

“Thus Henry Brown, second only to Horace Mann in championing state education, commented, ‘No one at all familiar with the deficient household arrangements and deranged machinery of domestic life, of the extreme poor, and ignorant, to say nothing of the intemperate—of the examples of rude manners, impure and profane language, and all the vicious habits of low bred idleness—can doubt, that it is better for children to be removed as early and as long as possible from such scenes and examples.'”

Whoa! The K – 12 public education system, as it now stands, is striking in its failure to benefit the children and families it is intended to serve. Critics of meaningful reform do not acknowledge the abysmal condition and performance of many government schools in America today, except to insist that they need more money. These critics, including the educational bureaucracy, teachers unions, and misguided statists generally, behave as if they accept the attitudes expressed by Henry Brown. They have no respect for private decision makers — families, churches, private schools of any stripe, and private markets in general. They do not understand the power of incentives and competition to allocate resources efficiently and maximize well-being. But they know how to disparage, defame, and propagate hateful rhetoric for those with a true interest in creating a better educational system for all.

Busting the K-12 Monopoly

12 Monday Dec 2016

Posted by pnuetz in Education, School Choice

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Betsy DeVos, Cafe Hayek, Don Boudreaux, Donald Trump, Education Funding, GI Bill, Opportunity cost, Public School Monopoly, Racial Segregation, School Choice, School Vouchers, Teachers Unions

Public school teachers are highly sensitive to any suggestion that their schools should “compete” for students, but it’s difficult to rationalize restrictions on competition faced by any institution that trades with consumers. Education is certainly not a natural monopoly. But in the U.S., K-12 public schools are granted an effective service monopoly over large segments of their local markets. Their monopoly status is a legacy and usually taken for granted, but that does not make the arrangement a natural state of affairs, or a healthy one.

The idea that education is a “public good”, or nonexclusive in the benefits it confers, is true only in a weak sense. Yes, there are external benefits from the education of children, but those are secondary to the personal benefits reaped by the children themselves as they go through life. And even strong public spillover benefits do not imply that government should provision the education itself, free of competition. Economic theory justifying intervention in markets implies only that the public sector should attempt to augment supply; direct production by the public sector is unnecessary and often unwise. Competition among schools will bring forth more of the private and public benefits than a monopoly.

But the public schools are free, and that doesn’t sound like a monopoly, right? Well, no, they aren’t free! Not to taxpayers, of course, but also, not to families with children who are denied the right to fully internalize the true opportunity cost of the resources claimed by public schools. The option to move to a school district with better academic performance is unavailable to many families. What would those families decide given a greater degree of empowerment to consider alternatives?

About 18 months ago, the topic of the K-12 monopoly was the subject of a favorite post on Sacred Cow Chips called: “Public Monopolists Say “Don’t Be Choosy“. It called attention to a thought exercise featured by economist Don Boudreaux on Cafe Hayek. Consumers are very choosy about their food, and they should be. Why shouldn’t they be just as choosy about another essential: the school for their children? Because the government won’t let them! Boudreaux lists factors that would make consumer grocery distribution just like the structure of K-12 education. That includes property taxes to pay for “public” grocery stores and the allotments of food they distribute, assignment of each family to a single public grocery store, but freedom to shop at “private” grocery stores at additional expense. He then asks how the food distribution system would perform. Here’s Boudreaux:

“Being largely protected from consumer choice, almost all public supermarkets would be worse than private ones. In poor counties the quality of public supermarkets would be downright abysmal. ….

Responding to these failures, thoughtful souls would call for ‘supermarket choice’ fueled by vouchers or tax credits. Those calls would be vigorously opposed by public-supermarket administrators and workers.

Opponents of supermarket choice would accuse its proponents of demonizing supermarket workers (who, after all, have no control over their customers’ poor eating habits at home). Advocates of choice would also be accused of trying to deny ordinary families the food needed for survival. Such choice, it would be alleged, would drain precious resources from public supermarkets whose poor performance testifies to their overwhelming need for more public funds.

As for the handful of radicals who call for total separation of supermarket and state—well, they would be criticized by almost everyone as antisocial devils indifferent to the starvation that would haunt the land if the provision of groceries were governed exclusively by private market forces.

In the face of calls for supermarket choice, supermarket-workers unions would use their significant resources for lobbying—in favor of public-supermarkets’ monopoly power and against any suggestion that market forces are appropriate for delivering something as essential as groceries.“

That’s exactly the behavior we see from the teacher’s unions, from which sanctimony flows liberally as to “public service”. Remember that the classic monopolist actively engages in denying choice and restraining trade through private actions, public relations and various other political means. But why would any sane observer have concluded that these “protected markets” would lead to successful outcomes?

It’s no secret that public schools in the U.S. face severe challenges. They are highly uneven in their results. A recent report in U.S. News said the following:

“Since World War II, inflation-adjusted spending per student in American public schools has increased by 663 percent. Where did all of that money go? One place it went was to hire more personnel. Between 1950 and 2009, American public schools experienced a 96 percent increase in student population. During that time, public schools increased their staff by 386 percent – four times the increase in students. The number of teachers increased by 252 percent, over 2.5 times the increase in students. The number of administrators and other staff increased by over seven times the increase in students.“

Federal efforts to improve K-12 education have been remarkably fruitless. Despite the massive increases in staffing over the past 50 years at all levels, graduation rates are still miserable in minority districts; schools are more segregated today than 50 years ago; huge gaps exist between the achievement of students in high and low-income districts; and math scores on standardized tests rank near the bottom of OECD countries, (science and reading scores are closer to the average).

The usual rejoinder from the public school establishment is that still greater funding is needed. Always more…. But families are exercising their right to opt-out. The number of home-schooled children is likely to exceed two million by 2020. There are now programs in 32 states facilitating choice through vouchers, tax credits, tax deductions, and education savings accounts. The body of research surrounding the effects of school choice is overwhelmingly positive: choice has improved academic outcomes in both private schools and the public schools that are forced to compete, it has a positive fiscal impact, and it reduces racial segregation. The constant drumbeat of additional funding requests looks unnecessary and wasteful in view of the options.

As for federal dollars, one suggestion is to pare back sharply the number of bureaucrats at the education department, putting the savings toward a program that would emulate the hugely successful GI Bill, under which beneficiaries chose how to spend the money.

Donald Trump’s nominee for education secretary is school choice advocate Betsy DeVos. Obviously, the new administration will not view the public school monopoly as untouchable. But let’s get one thing straight: no one is trying to “ruin” public schools. The objective is to fix something that’s been broken for a long time and, in so doing, to improve educational outcomes across all segments of society. The medicine delivered thus far, including top-down planning and profligate spending, has been expensive and ineffective, and even counterproductive in some respects. A few bad schools will fail under a competitive regime, but they already do. Bad schools have no sacred right to survive. Most struggling schools will improve, leveraging innovative techniques as well as their natural advantages, which often include proximity to a base of prospective students. It’s time to tackle the education problem by vesting consumers with sovereignty in the choice of schools.

Proof of Concept: School Choice vs. Failing Publics

09 Monday Nov 2015

Posted by pnuetz in Education, School Choice

≈ 1 Comment

Tags

Administrative Costs, CATO Institute, Don Boudreaux, Monopoly Schools, Monopsonist Unions, Rural Education, School Choice, Show-Me Institute, Specialization, Teachers Unions, The Netherlands

The evidence that school choice is associated with better educational outcomes has been mounting. Given the poor performance of so many public schools, it is time to reject the “sanctity” of their monopoly privilege. The link above emphasizes the promise of choice as a reform for public schools in the U.S. (as do several other links below from the Show-Me Institute and elsewhere).

It is implausible to suggest that the opportunities afforded by choice could make things worse than public-school outcomes. Poorly-served students and families have too much to gain from broadening their educational options and they know it. A recent survey of African-American parents of school children found that more than 75% of the respondents were interested “in obtaining a voucher to cover the cost of private or parochial school tuition for [their] children“. A majority agreed that:

“… I should be able to enroll my child in the school I think will give my child the best educational opportunity. If my choice is a private or parochial school then I should be allowed to use the same tax dollars allotted to every child in public school to cover the cost of their tuition.“

Choice should not be viewed as a threat to the public school system, although that is a familiar narrative issued by school-choice opponents. In fact, it will create new opportunities for public schools to excel, taking advantage of the benefits of specialization that are well-known in most walks of life. Choice and competition will either reform or weed-out the worst-performing schools and will encourage a rationalization of the administrative bloat so characteristic of public institutions. That’s all to the good, but by weakening schools’ market power, choice will change the relationships between public schools and families. Apparently that is threatening to vested interests, which underscores the importance of reform.

The Netherlands has had a system of school vouchers in place for almost 100 years, and research indicates that it has been highly successful:

“Specifically, access to private schooling has helped Dutch students. A 2013 study reveal[ed] strong positive effects for students using the voucher program to attend private schools. The effects were anywhere between 0.2 and 0.3 standard deviations, which would move a student at the mean of the standard bell curve of student performance up 10 or so percentile points (from a 50 to a 60).

Given these large effects, it shouldn’t be surprising that in a system where two thirds of the schools are private, we see strong academic performance. What’s more, according to the National Center on Education Statistics, Dutch schools spend on average $1,500 less per student per year than American schools do.“

A recent study from the CATO Institute demonstrated the long-run impacts of school choice on several types of outcomes. Little wonder that choice is described as a “Moral and Financial Imperative” (video). School choice is also an option for providing better educations to students in rural areas, despite the worn-out argument that distances make it impossible. Under today’s archaic structure, course offerings at many rural schools are necessarily limited, but new technology and choice programs can allow those schools to specialize and give their local students broader access to educational resources.

Teacher’s unions have been consistent opponents of school choice. They view choice as a threat to their members’ job security and their own ability to negotiate favorable contract terms. Perhaps, but the goal of improving educational outcomes cannot be subjugated to the goals of union monopsonists. When it comes to education, the schools should focus on serving children and their parents, and parents in failing schools want the kind of solution choice can offer.

Several months ago, a post here on Sacred Cow Chips discussed an entertaining question posed by Don Boudreaux: What if supermarkets were like public schools? To quote Boudreaux directly:

“In the face of calls for supermarket choice, supermarket-workers unions would use their significant resources for lobbying—in favor of public-supermarkets’ monopoly power and against any suggestion that market forces are appropriate for delivering something as essential as groceries.“

Parental control is a critical change needed in our schools. Schools should never be placed in a position exceeding the authority of parents over their children, even if public funds are involved. Teachers and administrators of public schools must learn to treat parents like customers. The only way to assure that kind of responsiveness is to give parents a choice.

Public Monopolists Say “Don’t Be Choosy”

12 Sunday Jul 2015

Posted by pnuetz in Markets, School Choice

≈ 3 Comments

Tags

Cafe Hayek, Don Boudreaux, K-12 education, monopoly, Politicized interests, Private education, Public education, Redistribution, Restraint of Trade, School Choice

Imagine a food distribution system that mirrored the organization of K-12 education in the U.S. How do you think it would work out? That thought exercise was conducted four years ago by Don Boudreaux in his Wall Street Journal op-ed: “If Supermarkets Were Like Public Schools”(gated). Boudreaux has helpfully reblogged this op-ed at Cafe Hayek as part of his post “Separate School From State“. Read the whole thing! Because this is a topic in economics and I am so very pedantic, I prefer not to use the term “market” at all in this context. After all, a public “supermarket”, as discussed by Boudreaux, is no more a market than a public school is a market. I will use the term “public grocery store” instead, except when quoting Boudreaux.

The comparison of grocery stores to schools involves outputs that are both considered essential. In fact, there should be no argument that food is the more essential of the two. Yet the essential nature of educating children in a modern society is thought to be an important rationale for the existence of a public school system. Would supporters of public education care to apply the argument that “market forces can’t supply quality education” to another essential product, like food?

Boudreaux invokes several features of K-12 education in “designing” his hypothetical food distribution system:

“Residents of each county would pay taxes on their properties.“
“Each family would be assigned to a particular supermarket according to its home address. And each family would get its weekly allotment of groceries—’for free’—from its neighborhood public supermarket.“
“No family would be permitted to get groceries from a public supermarket outside of its district.“
“... families would be free to shop at private supermarkets that charge directly for the groceries they offer. Private-supermarket families, however, would receive no reductions in their property taxes.“

Economic theory predicts that the monopoly status held by public grocery stores over the provision of “free food” within their districts would cause the quality and variety offered at those stores to suffer. This is just a form of restraining trade, which is what monopolists do. The classic monopolist charges a higher price and produces less output. Exactly the same is predicted in Boudreaux’s experiment.

One difference in comparing food stores to schools is that families, presumably, could purchase some of their groceries from private stores and meet the rest of their food needs from their district grocery store at no marginal cost, whereas the school selection is all public or all private. However, this does not invalidate Boudreaux’s assertion that the quality offered by the monopoly provider will suffer.

Like public schools, there would be massive variations in quality across public grocery stores due to variation in the tax base from one district to another. This would tend to reinforce differences in the value of property across districts, because it is so desirable to live in a district with a good public grocery.

Here’s an extended excerpt from Boudreaux:

That sounds all too familiar. Even with massive state redistribution of public grocery store funding from wealthy to poor districts, the result would be much the same, as it is with public schools. Increased grocery store funding cannot correct the larger problems plaguing the community, many of which are created by the welfare state itself. And increased funding does not correct fundamental dislocations created by a monopoly, especially a public monopoly. The entrenched, politicized interests that infest public institutions always resist changes that might improve quality. They are typified by bloated administrative machinery and a general lack of responsiveness to the community. Only competition and choice can eliminate these tendencies and drive improvement.

An objection that might be raised to Boudreaux’s comparison is that public schools must accommodate a student population with wide variations in learning ability. It may be claimed that this variation strains the resources of public relative to private schools. However, that burden is due in large part to the structure of the education system. A benefit of competition and choice is the extent to which it can accommodate diverse needs, and there is no reason why education should prove to be an exception. In fact, diverse needs are already met very well by private education, but they serve only “private school families.” Empowering all families to choose the schools that best accommodate their needs would bring higher quality to our K-12 education system.