School Choice

What if we ran our restaurants and grocery stores like we run our schools?  What would they look like?

It isn’t hard to imagine. They would look like those run by the Soviet Union.  There would be a few elite restaurants and grocery stores serving the very rich/privileged, and the rest would vary from mediocre to terrible.  This is pretty much what our schools look like today – like Soviet grocery stores.  Like most things, there is an 80/20 rule.  Twenty percent of our schools are private, and usually very, very good – but expensive.  Eighty percent are public.  There are a few good ones, but the vast majority are mediocre.  Many are “Dropout Factories” and broken beyond repair.

I believe the way we run our restaurants and grocery stores in America is outstanding.  The government regulates the food served/sold, but doesn’t have too many laws telling business people what kind of restaurants they can open,  who they can hire/fire, or what kind of food they serve.  In other words, they regulate – not administrate.  As such, we have a free market that rewards good businesses and shuts down bad businesses.  It is a self-correcting system.  More importantly, this free market encourages and rewards innovation.  The result is that we have restaurants of every type and size.   We have expensive ones and cheap ones, fast ones and slow ones, and virtually everything in between to suit every taste.  Grocery store choice is similar.  You can get your food at Safeway, or Costco, or Trader Joes or Whole Paycheck (Whole Foods).  And I am truly glad the government takes an active hand in regulating the safety of the food we eat.  It is a necessary function of the government which no doubt saves many lives.  Capitalism is not altruistic and must be regulated.

So why do we not run our schools in the same manner we run our food?  Is education more important than food in some way that I don’t understand?

The solution to fix our schools is alarmingly simple. We just need to do what we Americans do best – treat education like the business it is.  We are a nation of entrepreneurs, after all.  Specifically, we need to get the government out of the business of administering schools so that they can actually be run like businesses.

Public schools are fundamentally flawed because school administrators don’t have the ability to fire teachers and fire students.  Just imagine being a business person and not having the ability to fire your employees or refuse service to customers who are bad for your business. Most people I know would feel outrage at this suggestion.  I don’t understand why we don’t feel outrage when this argument is applied to schools.

Public schools must ‘teach to the test” and are dependent on the fickle nature of politicians and voters for their money.  Our public schools really do look like Soviet Union grocery stores: chronic shortages of product, the government deciding what products go on the shelves, workers who don’t care and can’t be fired, and layers of inefficient bureaucracy.  Where is the outrage?  I’m baffled.

Haven’t we run this experiment before?  Yes, we have.  Capitalism (and its self-organizing free markets) beat the crap out of Socialism and its centralized command and control every time.  Even China has switched its system from Socialism to Capitalism – and is on pace to become the largest economy in the world because of it.  Let’s face facts – the American educational system is Socialist in its current form.

Free markets aren’t perfect, but they represent our best option for education in America.  We understand free markets and how to regulate them.  We make mistakes, but we fix them.  As such, the best option for making our schools great is to get the government out of administrating education and focus it on what it should do – raising funds for education and regulating the businesses that provide education.

I call my proposed solution “Publicly Funded School Choice”.

Currently the United States spends somewhere around $8,500 per student, per year.   The idea for Publicly Funded School Choice, in a nutshell, is to give the parents of each student a voucher for $8,500.  This voucher could be used at any public or private school with a state license.

Before we continue, let’s spend a few minutes on the concept of vouchers.  In particular, let’s look at what a great hatchet job the Teacher’s Unions have done on vouchers.  They have certainly out-marketed and out-politicked the school choice advocates.  Teacher’s Unions, like any union, have a vested interest in protecting the money that they get from the government.  Like all unions, they love the fact that merit and ability have nothing to do with how they get paid.  As such they have demonized the concept of vouchers.  They have been very effective in painting them as an instrument for the rich even though vouchers draw their strongest support from inner-city minority mothers.  Their chief argument is that vouchers will slowly bleed public schools to death.  And they are correct.  With vouchers public schools will die because private schools will put them out of business. Superior products almost always win in a free market.

The government is ill equipped to administer schools.  The business model of public education is broken in the way that the Soviet Union was broken.  There is no way a government controlled model can compete with an innovative free and open market.  If we roll out Publicly Funded School Choice the public school system will eventually die and be replaced by an explosion of choice.  Instead of a few large state run institutions  there will be many, many smaller schools that can specialize.  But who knows?  This is the beauty of free markets – investment goes to where it is wanted and stays where it is well cared for.  There might be huge schools that emerge that operate like Costco (a great business model).  There might be many small schools that look like corner grocery stores (another great business model).  The existing private schools already look like Whole Foods, but who knows how they will morph when parents believe they can get largely the same product for $10,000 less due to newly found competition? The possibilities are really exciting and the downside is low.  We can’t do worse than we are already doing.

Educational parity, like fiscal parity, will never exist no matter what the system.  Publicly Funded School Choice will not result in educational parity, but it will result in dramatically better educational results across the board.  Bad schools and bad teachers will go away fast.  They won’t be able to hang around as dropout factories for decades, as they currently do.

Think of the issue this way:  You have to place an $8,500 bet on each student and your choices are public or private education.  Which would you chose for your child?

Here are my recommended steps to fix education (in order):

  1. Close down the US Dept of Education.  Lower federal taxes and have each state raise taxes to make up the shortfall.  The Federal Government is an inefficient and unnecessary layer of bloated bureaucracy.  Pork city.
  2. Have each State decide how much money it wants to spend on each student.  Provide vouchers in this exact amount.
  3. Turn all the state public schools into Charter Schools.  These will die slower than regular public schools.  There is great work being done by Charter Schools, but they still won’t be able to compete with private schools because they will still have a lot of upstream politics to deal with.
  4. Each State should morph their Department of Education.  As students flee from public schools the job will shift from administration to regulation and licensing.
  5. States should pass laws giving tax breaks to schools.  This is a great investment in the future.
  6. Sit back and watch the educational innovation and creative destruction do its magic.  Within a decade our schools will start looking like other healthy American industries. Our children will enjoy the highest and finest standard of education in the world.

Publicly Funded School Choice FAQs (coming soon).

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  1. » Blog Archive » Waiting for “Superman” - - April 14, 2011

    […] news is that a system of school choice can’t be worse than the system that exists today.  Publicly Funded School Choice will will result in public schools eventually being replaced by universal private education.  […]