January 2, 2007 10:58AM

Semi‐​Tough — New Ed Report Offers Right Diagnosis, Wrong Cure

An ultra-blue-ribbon report published last month by the National Center on Education and the Economy argues that America is headed for economic disaster unless we dramatically restructure our schools. True enough.  But diagnosing a problem and solving it are two different things, and it is in the solution department that the report, titled “Tough Choices or Tough Times,” disappoints.

The study correctly observes that America must produce a more knowledgeable, flexible, and creative workforce if we are to have any hope of maintaining our current standard of living. If we don’t, an ever-increasing share of U.S. jobs will be filled by better-educated, lower-wage workers in countries such as India and China.

In explaining this economic challenge, the authors (a who's who of political, business, academic and labor leaders) make a compelling case for free markets. They show how competition, consumer choice, and the profit motive encourage businesses to hire the best and brightest workers they can find – wherever they can find them. Free from intrusive regulation of their personnel and product design decisions, businesses seek to satisfy their customers’ demands as ably and efficiently as possible. They do not do so out of charity, or because they are told to by the state, but because it serves their own interests. This is Adam Smith’s invisible hand at work – and oh how it works.

The fact that the authors understand this process so well makes their education policy recommendations all the more disappointing and incongruous. Instead of recommending that we harness these same free market forces to transform our schools, they offer what amounts to a weak charter school reform, suffocated with regulation.

The report is a central planner’s Christmas list. Teachers would continue to be certified by the state and their (dramatically increased) salaries set by the state. They would administer to students a curriculum determined by the state, and gauge students' success using mandatory state tests. In fact, progression through the system from secondary to higher education would be dependent on students passing government examinations.

These nanny-state recommendations are, mercifully, punctuated by the occasional dose of liberty. The authors recommend, for instance, that schools should be chosen by families instead of being assigned to students by bureaucrats. This alone, they seem to imagine, would create a vibrant educational marketplace. But consumer choice is meaningless in the absence of producer freedom. If schools cannot specialize and cater to different interests and preferences – by setting their own curricula, choosing their own tests, determining their own teacher selection criteria – then the diversity and innovation that characterize free markets cannot and will not arise. And the report’s recommendations curtail all of these freedoms.

Further inhibiting market processes, the authors would preclude the ability of their charter-like schools to set their own prices or even to charge tuition. But as any first year economics student is aware, market-determined prices are an indispensable mechanism by which consumer preferences are communicated to producers, and by which producers are encouraged to offer the particular kinds of services most in demand. Eliminate market prices and you cripple the market.

How could the contributors to this report have produced recommendations so fundamentally at odds with their own astute diagnosis of the problem? By thinking very hard, inside a very small box.

Marc Tucker, vice chairman of the commission responsible for the report, told the Post’s V. Dion Haynes that they aimed to produce “the best national public school system in the world." If you set out to build the best horse-drawn buggy, you won’t end up inventing the automobile.                 

The authors of this report assumed that the state must be at the center of our education system much as early astronomers assumed that the Earth must be at the center of our solar system – with equally unsatisfactory results.

Unaware that the planets orbit the sun, pre-Copernican astronomers tried to reproduce their trajectories with clever, intricate, but inevitably doomed geocentric models. In a similar vein, the Center struggled unsuccessfully to reproduce market incentives within their state-centric policy environment. “Both the state and the district could create a wide range of performance incentives for the schools to improve the performance of their students,” the report suggests.

But instead of trying to simulate market incentives within a centrally planned system – a venture proven futile by the failed socialist economies of the 20th century – why not actually create a free education marketplace? With a simple program of need-based financial assistance, all families could be assured access to schools of their choice.

The National Center’s report fails to even consider this market-centric solution, however, and thereby consigns itself to the status of an historical footnote – a doomed and oddly anachronistic attempt to achieve market results through government edict.

[An edited version of this post previously appeared in the New York Daily News].