He’s not alone.
Conservatives have long championed central planning in addition to parental choice, but in recent years centralization has been ascendant. Department of Education alumni William Bennett, Chester Finn, and Diane Ravitch, all appointed under Republican administrations, now place greater emphasis on national standards than on choice. Last month, Mr. Finn faulted Ohio’s charter school system for placing “too much trust in market forces.”
Their faltering support stems from disappointment with the impact of existing U.S. charter school and voucher programs, and what they think it says about market reform in general. Stern, for instance, laments that while Milwaukee’s voucher program has benefitted the low income students who gained access to private schools, it has not dramatically improved the city’s public schools.
But criticisms such as those of Finn and Stern don’t reveal any failure of market education, because existing U.S. “school choice” programs do not constitute, or even closely approximate, free markets. That anyone imagines otherwise shows how poorly markets are understood, even among conservative education reformers.
Do charter schools really rely too heavily on “market forces”? Consider some key elements of free markets: 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, and payment by consumers rather than a third party. With charter schools, these features are either grossly hobbled or absent. Yes, charter schools produce some attenuated competition and parental choice, but to imagine that those two diluted ingredients are sufficient by themselves (or even excessive!) suggests a badly mistaken notion of what a market is.
Milwaukee’s voucher program has indeed helped many children, but it also falls far short of a market. First, it is capped at 22,500 students. That’s too little to justify large‐scale R&D investment by education entrepreneurs. If the market for computers were limited to 22,500 customers, Microsoft, Apple, and Dell would cease to exist. Private schools must also accept the voucher as full payment, but such price controls are almost universally derided by economists as counterproductive. If it were not for the fact that electronics manufacturers could once charge $1,000 for a DVD player, it would never have become possible for the units to sell for $30 today.