Stern Shouldn’t Be Taking any Bows…

In an essay to be released later today by the City Journal, Manhattan Institute senior fellow and school voucher supporter Sol Stern argues that recent free market reforms have failed to transform American education, and suggests that choice advocates should refocus on curriculum standards.

The central problem with Stern’s argument is that there have been no recent free market reforms in American education.

As economist John Merrifield, myself, and others have been at pains to point out over the past decade, contemporary U.S. “school choice” reforms lack some or all of the essential characteristics of free markets, and as such cannot be expected to perform like markets. Stern fails to realize this because of a demonstrably poor understanding of what a market is.

Stern’s mistaken notions about markets are starkly revealed when he declares that: “the country’s 1,500 ed schools represent an almost perfect system of choice, markets, and competition.” In reality, ed schools exist to serve the artificial and legally mandated requirement for public school job applicants with state accredited teachers’ college degrees. In the vast majority of states, even states with so-called “alternative certification” programs, anyone who teaches in a public school must have (or be pursuing) a government-approved degree in education. But because the public school system is protected from competition by its monopoly on $13,000 of tax funding per pupil per year, it has no systemic incentive to hire people with skills proven to accelerate learning. Ed school professors know that, and so fill their students’ heads with whatever philosophical, political, and pedagogical views they find most agreeable.

Furthermore, as Marie Gryphon pointed out in Giving Kids the Chaff: How to Find and Keep the Teachers We Need, public school systems often hire less qualified applicants over more qualified applicants. All this is why, as Stern acknowledges, the instruction offered in ed schools is so roundly derided. To mistake this massively distorted, monopoly-driven labor market as “an almost perfect [market] system” reveals a remarkably poor grasp of markets.

Among other things, markets require: prices determined by supply and demand, private ownership of businesses, low or no barriers to the creation of new businesses, few or no barriers to workers entering the profession, minimal regulation, the ability of owners and investors to profit from their efforts, unfettered consumer choice, and payment by consumers rather than a third party. Furthermore, to see any significant market forces, there must be large scale demand – millions of potential customers.

Apple would not have invested millions of dollars developing the first iPod, or dramatically increasing its capacity in recent years, if its customer base had been capped at 22,500 people – as Milwaukee’s voucher program is capped. To expect results such as we see in our vast market economy from tiny and hobbled existing school choice programs is like expecting an electric train set to match the power of a diesel locomotive. And abandoning real market reforms because these toy trains have failed to match some people’s unrealistic expectations is foolish on its face and disastrous public policy.

We will see dramatic progress in the field of education that matches the progress in the rest of our economy only when our school system enjoys all the essential features of that economy. For that to happen, existing school choice programs will have to be dramatically expanded and liberalized, or new programs, such as Cato’s own Public Education Tax Credit plan, will have to be implemented.

As Milton used to say, “there’s no such thing as a free lunch.” Want market results? Make a market.