Ways K12 Education Is Not a Free Market

Many times I have heard conservatives talk about K12 education as if it were a market, especially when the topic of school choice comes up.

I am completely in favor of school choice, but there are some important ways in which the market idea fails. If we want to talk about how to improve the situation, it might be useful to explore those ways.

First, education is mandated. In that way, it is like Obamacare. Parents cannot just opt out. If you want education to work like the free market, you have to let parents opt out, and you have to accept that some parents won't be able to afford to send their kids to school. Some kids won't get an education, just like not everyone can or wants to buy a Cadillac.

Second, public funding plays an essential role. As soon as you introduce public funding, including school choice vouchers, you are again not really dealing with a free market situation. However, if funding were attached to students, and students / families could choose which schools to attend, wouldn't that be analogous to a free market situation? Not as things stand now, because ...

Third, public and private schools do not follow the same regulations. If you really want to see how they stack up against each other, they need to follow the same rules. If we want improvement, we would let public schools act like private schools, meaning they don't have to take any given student, nor keep problem students, nor keep problem teachers. Here again, if you let every school decide not to take some students, you will end up with some students not getting any education.

How much we really want K12 education to be a free market depends in part on how determined we are to offer every child an education. The more like a free market we want it, the less we can insist that every child have the chance at an education.

So why am I in favor of school choice? Because we are stuck with a system that doesn't work for a lot of students. Until we pretty thoroughly overhaul our system, school choice is the best we can do.


E Hines said...

First, education is mandated. In that way, it is like Obamacare. Parents cannot just opt out. If you want education to work like the free market, you have to let parents opt out....

No, this has nothing to do with markets. Our bodies mandate that we eat; we cannot opt out. All a requirement to do something does is create a market for that something. The kind of market that is comes from a separate and subsequent question: what will be the rules structuring that market.

...you have to accept that some parents won't be able to afford to send their kids to school.


[P]ublic funding plays an essential role. As soon as you introduce public funding, including school choice vouchers, you are again not really dealing with a free market situation. However, if funding were attached to students....

Most voucher programs I've seen do have the vouchers follow the student. And this does create one component of a free market: competition. There is a levelness to the playing field here, too: the vouchers are only for a fraction of the public school cost of that student, typically in the neighborhood of 80%. Thus the voucher parent has to make up the difference, if any, from what the the voucher school actually charges. And quality public schools do not lose this competition.

[P]ublic and private schools do not follow the same regulations.

You bet. And I have no problem deregulating the public schools, including letting them more easily toss trouble makers. This will require dismantling the teachers unions; they're the ones loading on the regulations; it's how they protect certain jobs.

The more like a free market we want it, the less we can insist that every child have the chance at an education.

These two aren't very tightly connected. Part of the relative success of voucher and charter schools is that not every child has the chance at an education today, for all that he's sitting in classroom.

Finally, you mentioned in the other thread You get what you pay for. Pay crap and you'll get crap teachers. Yes, but it's not a monotonic relationship. Voucher and charter schools often pay their teachers less and/or have them work longer than their public school competitors. This is one of the arguments of teachers unions as they try to force the unions into those other schools. Work environment has a value to the teachers, too. Of course, there's a limit to the pay/hours differential beyond which will lead to crap teachers in the voucher/charter schools.

In the end, the question comes down to what we want to do as a society with the kids who can't afford to go to school in a free market environment (I argue that these won't be very many in a free market environment, and property taxes--even very reduced from today's rates--which is how the bulk of public schools are paid for today, could be used to help fund those few (of course, keeping this bit of welfare limited to that limited purpose would be as dicey as any of our other welfare programs)), what we want to do with the kids with behavioral problems that cause them to be expelled from school (and how much to we want to separate this population by reason for misbehavior), and what we want to do with these kids after they've grown up.

There are colleges that work well as free colleges (functionally; most costs get covered by grants and scholarships); Hillsdale College is an example. Whether that can scale to K-12 and to a significant degree is a separate question. There are also, in K-12, church schools that also find a way to take kids into them at costs the parents can afford.

Eric Hines

Grim said...

This is roughly the argument I make for the minimum wage. I expect you'll have about equal success with it. :)

raven said...

Just stop paying welfare to the parents, and stop paying teachers a salary.

Then give out the money, directly, to parents and teachers who manage to get the kiddo's educated to a certain level every year.

And fire all the administration.

Commission sales, baby.

That is called motivation.

What do we spend now? 15 or 20K a year , per kid, to the industry?

So a teacher with a 30 student class, could make around 150,000 bucks a year if she does well and the bonus per student is 5K.

Don't matter where she teaches them, could be an abandoned warehouse with ratz n' catz.

The parents get another 5k directly.

And the kids get paid too, on a sliding scale.

All based on the kid learning to a certain level, determined by me.

Seriously, we spend so much money on the "system", that
anybody could devise a method of incentives that would produce results, given that much money. Except, apparently, our education gurus. They should be jammed into a pencil sharpener headfirst and hammered into the ground, where they could serve honorably as fence posts while achieving their personal pinnacle of potential.

Raven 101.

Texan99 said...

We may have to make a choice between being able to force every parent to provide his kid with an education approved and acknowledged by the state, and having schools that provide a chance at a decent education. Alternatively, we could let schools function like a private business, at least in the ways that universities do, then prosecute parents who fail to let their kids take advantage of this free gift, just as we would prosecute parents who denied their kids food.

As for kids who can't or won't learn, I guess we'll have to decide how impossible we're willing to let them make it for anyone else to learn.

Tom said...

Eric: No, this has nothing to do with markets.

I wasn't talking about markets; I was talking about FREE markets. Freedom is about the things government cannot coerce you in, not about biology. On everything else there, I agree with you.

None of this post is an argument for or against one aspect or another of the system. It's just pointing out how free market arguments fail within the current system. I don't see the case for vouchers to be the free market because that's not a very free market at all. I believe the case for vouchers is they're what's best for the students in school now.

As for reforming the system, I have a few answers that I believe would greatly improve the current system, but they may not be the best answers. I don't understand either the politics or the economics of education enough to believe I definitely have the best answers. Maybe Raven's idea that we should toss the current system altogether is the right one, in which case my reforms would be pointless. I dunno.

What I do know is, the free market arguments for the public / charter / private school discussion aren't really that appropriate because it's not currently a free market.

Thomas Doubting said...

Raven, your system would depend greatly on how students were assessed. I like your incentive system, but it would also provide a great incentive for teachers, parents, and students to collaborate on cheating to get qualifying evaluations and, thereby, cash. How would you address that?

E Hines said...

I wasn't talking about markets; I was talking about FREE markets. Freedom is about the things government cannot coerce you in, not about biology.

Except that you are talking about markets. The degree of freedom of a market is created by the rules government sets for the market (and you need a government, else the markets will be anything but free--that's why men do social compacts), and that is government coercion.

Don't confuse freedom with liberty, either; freedom is from government's (necessarily) coercive rules.

Eric Hines

Tom said...

I don't think the freedom of a market is about the rules the government sets for it so much as the government guaranteeing the freedom to have a market and doing things like protecting property and enforcing contracts. To the extent that the government actually regulates a market, it is not free.

raven said...

Any system can be gamed. All you can do is put in a certain number of safeguards and penalties. They are doing it already, IIRC Atlanta had a major scandal about grade cheating in order to justify more dollars.

most people are not stupid. There is no real reason anyone should have to go to the effort of cheating if it is easier to just learn. Kids WANT to learn, and if they can be taught early enough, perhaps they can be inoculated against the ennui that seems to infect our system.

Tom said...

Oh, sure. I wasn't criticizing your idea. I was just curious how to planned to keep it honest.

douglas said...

Thomas, cheaters would be cheating their own children most of all. That's a pretty good, if imperfect, discouraging factor.

Two things:
First, this needs to be done at state or local level. Costs are so disparate between San Francisco and Little Rock that you can't really regulate them on the same standard.
Second, schools taking vouchers would have to accept applicants by lottery. Some schools would opt out and function as private schools do now, the new voucher schools would be a hybrid of the current public and private schools. Public schools would have to change to compete, or empty out and be shut down or replaced.

Tom / Thomas Doubting said...

I should clarify: I post under Thomas Doubting, but comment under Tom. I was signed into Google when I commented at 11:11 and forgot to change it to Tom.

douglas, I know the kids would be the ones getting hurt, but without some good safeguards in raven's system, a large percentage of our kids would be educated by charlatans who fed them the answers. After all, if the kid fails whatever assessment there is, the teacher doesn't get paid, the parents don't get paid, and the kid doesn't get paid. That's a huge incentive to cheat so that the kid doesn't fail that assessment.

I know no system would be perfect, but if there is no system at all to protect against fraud, fraud is what you would get a lot of. You would end up with traveling teachers who ran elementary classes for a few years in one place, then moved on before anyone caught on. Look at the money raven is talking about and the complete lack of accountability in the system and tell me you honestly think fraud wouldn't be rampant.

Besides, this is just idle speculation. How likely are we to actually implement raven's system? I don't get the resistance to suggesting a means for keeping it honest. If you don't have one and can't or can't be bothered to think of one, just say so. It's not a big deal.

Texan99 said...

Well, to look at it that way, there's no such thing as a free market anywhere. There are always constraints. The constraint that operates on public schools is not a very unusual one; it's a lot like the constraint on things like food, shelter, and medical care, which are so critical that people essentially have only the choice between providers, not the choice to say "no" in general. The government can say "Thou shalt send thy child to school," but as long as it doesn't say, "Thou shalt send thy child to this particular school, or one on this short list of providers that we protect from the consequences of even the most egregious failure," it can't do too much harm, and market forces will operate powerfully enough to force surviving schools to provide more of what parents are demanding.

Of course it always helps to strengthen the connection between what parents are paying and what they're getting from the school. That's one reason vouchers are powerful. The important thing is to increase choice one way or another. The easiest way is to tell people they can choose any school in a system, but of course everyone will flock to the good magnet school, which will get overcrowded, because there are no price signals to sort out an imbalance between supply and demand. Vouchers are better, because they expand the choice of schools to include charter and other private schools, which starts to help with supply and demand. It's like building a collateral blood supply. What we want from some failing schools is a lot like apoptosis; what government protection demands is more like necrotic tissue in place.

Texan99 said...

My thoughts on the issue of how we test/judge: it's not a problem that's peculiar to schools. Yes, it's harder to judge how well the school educated your kid than to compare TVs by price and performance, but it's not harder than to judge a doctor or a hospital. It's very hard to judge any complex, long-term activity. But what do we conclude from this? The task doesn't get easier when the consumers are shut out. There aren't government panels that are good at this, either, and anyway they're not judging the schools on the same criteria that are important to the parents. In the end, either the parents are satisfied with what the school is doing for their kids or they're not. If they're not, the government shouldn't be forcing the parents to send their kids there, and it shouldn't be obstructing the formation of alternative schools, even if that means private schools, charter schools, and vouchers.

It's possible parents are dumb and will choose schools that the government and its professional educators abhor. Tough. People choose bad doctors, too, and bad hospitals. We'd do better to limit the government's role to shutting down any true charnel-houses, and leaving the gray-area judgment cases to the parents/patients.

raven said...

The best way to the money-fraud under control is to keep it local.
People don't give a damn about "other peoples money". They care a great deal about their own. Stop sending dollars to the Fed Ed and make the payments from local money- when people game their neighbors the response will likely be severe.

Commission teaching is just a quick off the top of the head idea- but there has to be some way to get some results-we are spending far too much money, and the kids are doing way worse than they were when they were in mixed grade one teacher schoolhouses where the high tech was a new blackboard.

J Melcher said...

Raven is raving, but makes a good point even so.

Right now we pay for inputs. So many kids in so many seats for so many days -- whether or not the kids learn anything. At the end of the expense we may test, and in the course of a few years compare THESE seats to THOSE seats and see if there is a difference we may hope to replicate for ALL seats.

If we somehow pay for OUTPUTS, a lot of things would change in related consequences. Say the state pays $10,000 to the kid who passes the grade level test. Tests are offered, like SATs, maybe four times a year. (So much cash up front, so much in tax credits to the family, so much else for some kind of savings account for later post-secondary schools... details to differ in one state from another.) Must pass at age/grade level to advance. Failure to advance means a reduction (20% per year) for taking the same grade test in the delayed year. So a 12 year old still taking the 4th grade test only gets (uhm, arithmetic...) $6200 when he/she finally passes?

Cheating becomes a high stakes game between families and testing centers.

Homeschool families make out like bandits.

Teaching / tutoring "for profit" enterprises have incentives to offer services at levels capped by the amount of the prize. Few will pay $10,001 in advance to prepare for a $10,000 prize. There will be incentives to provide standard services at minimal costs -- admin layers will be on the chopping block. Parochial schools that already charge less than the state cost-per-pupil won't make out quite as well as homeschools but will still see a surge.

Public schools will die a quick and grisly death. (This is a good thing...) They may hire their facilities out for NFL minor-minor league football franchises.

The "value of a good education" becomes a visible tangible thing for certain demographic groups that, at present, haven't really bought into the concept.

Kids with rotten parents may wind up "divorcing" their families for depriving them of opportunities to claim the education prizes. Again, homeschooling parents may find themselves in demand as paid foster supplemental parents.

Really bright kids may advance by taking more than one "grade level test" in an academic years. So the hypothetical 12 year old may be taking the grade 8 or 10 level tests. Solves the boredom problem, anyhow. And lets the really college-bound kid save up a nest egg for the Ivy League.

Pay for outputs. If not as described, in some other way. We've been paying for inputs for a very long time. Time for a change.

raven said...

"Raven is raving"

issues guttural croak and flaps off....

Texan99 said...

The smart kids would be financially rewarded for their success, which is un-American. Wouldn't it be more fair to write the biggest checks to the kids who learned least?

Tom said...

Well, to look at it that way, there's no such thing as a free market anywhere. There are always constraints. The constraint that operates on public schools is not a very unusual one; it's a lot like the constraint on things like food, shelter, and medical care, which are so critical that people essentially have only the choice between providers, not the choice to say "no" in general.

I didn't say "no constraints," just "no government constraints." So, biological necessity isn't a good analogy. For example, a perfectly free market is still constrained by supply and demand. It's still constrained by the availability of raw materials, by technology, by social mores, etc.

Also, for me this is not a binary free / unfree thing. It's a spectrum. The more government regulates it, the less free it is.

Think about free speech. That just means government can't control your speech. It doesn't mean other citizens might not shout you down, or stop doing business with you, or stop inviting you to their parties. It doesn't mean that if you get laryngitis and lose your voice you can somehow magically speak anyway. It just means the government doesn't control it.

Texan99 said...

When it comes to analyzing whether a tool like vouchers can be useful in imposing free-market-style discipline on a provider, I'm not sure I see why it would be important to keep in mind that the constraints that make the market less than perfectly free are emanating from the government. Federal, state, or biological, what's the difference in this particular context? We can agree the school market isn't free, but I guess my point is that it needn't be entirely free in order for these traditional tools to do their good work. Yes, they might work even better if the market were more free, but that's not our dilemma.

Tom said...

Raven and J, I like these ideas. They're interesting.

Tex, the short answer is, because keeping it in mind will lead to better solutions. The longer answer is:

1. It's a matter of what is possible. E.g., we can repeal Obamacare, but we can't repeal Death.
2. State regulations are easier for the citizens of that state to change than federal, nationwide regulations.
3. It's ALL ABOUT regulations, so if we don't keep that in mind, we won't end up with good solutions.
4. It's the honest argument. Teachers understand the flaw I've pointed out in the vouchers = free market argument, so it looks dishonest to them. We'd get more traction there if we recognized the flaw and addressed it.

Texan99 said...

Honestly I'm not following you. If you're saying that we can't put traditional free market tools to good use because they're politically unpopular, particularly with people who fiercely support the mandatory public school monopoly, then of course I agree. I was talking only about whether the tools would actually work if we tried them.

But yes, the employees of the public schools would hate to be exposed to competition. People who've been protected from competition always do, and they always explain why the customers need to be protected from the choices that might allow them to expose the providers to inconvenience. The role of the state in this scenario is first to supply the protection from competition and then to hang onto it desperately in order to placate the political forces that benefit from the protection--i.e., not the kids not the parents.

At least in the free-trade arena, the people asking for protection from competition openly admit that they want protection for themselves. They don't generally argue that it's primarily in the best interests of the customers who have to pay the high, subsidized prices or accept the lower-quality goods. They make a case that the price is worth it and the quality difference is either illusory or the legitimate cost of protecting our own citizens and minimizing our reliance on unstable foreign supply lines.

Tom said...

You're right, you have completely missed what I was trying to communicate.

I apologize. I really need to work on expressing my ideas clearly.

Tom said...

Also, your last response looks more like a retort than a response, so if I was an ass and provoked you, I apologize for that as well.

Texan99 said...

Oh, I'm so sorry, I was really trying to avoid that tone! It's a failing of mine. Honestly, I was just trying to sort out the subject, not deliberately retorting and certainly not offended. Shall we try again? I'm clearly not taking your point--not trying to be difficult. It's a topic that interests me very much.

And looking at my last post again, I totally see what you mean about the tone. Oops. It's quite a usual tone with me, you know, which may not reflect well on me but certainly is no reflection on you!

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