What about school competition?


Econ 101 is one of the most dangerous courses taught in the modern American university. A semi-common prerequisite in many non-economics majors, it ends up being taken by a wide variety of students who never pursue economics any further.

Most of what gets taught in Econ 101 is promptly forgotten after the final exam is turned in, and what remains usually boils down to the following:

  •  Something about supply and demand
  •  Markets find efficient solutions
  •  Something about opportunity cost…maybe…never mind

Why is this a problem? Because we end up with a society full of policymakers whose default understanding of economics – extended to all policy – is that markets find efficient solutions. We’ve seen this crop up in many areas: privatization of Social Security, privatization of health care, privatization of Detroit. In education, the magical market dream gets rolled into “school choice.”

Now, as with almost everything in school policy, an educational rationale can be built for school choice by more broadly construing it as offering a diverse range of schooling options so as to better serve a heterogeneous population. This I do not have a problem with.

I do have a problem with using school choice to drive a magic market dream of competition-based schooling. This creates a pernicious system that emphasizes a school’s ability to “sell” itself, more or less independently of its actual quality.

Part of this is because—on the only measures we really have access to—there is no real competition between schools. Looking at last year’s Adequate Yearly Progress (AYP) report, 53.4% of Minnesota’s charter schools failed to make AYP, compared to 48.1% of traditional public schools (PDF). If traditional publics are worried about competition from charters, it isn’t because of charters’ academic performance.

These are obviously broad trends, and individual areas can see charter schools that dramatically outperform their nearby traditional public schools or traditional publics that dramatically outperform charters.

The point is that, overall, those who put their faith in the Econ 101 understanding of markets are doomed to disappointment when it comes to education. Schools just don’t work like a market, and we should push our policymakers to move past this destructive, flawed mindset.