Public Monopolies

The public school system is more firmly and deeply established than it ever has in human history. For the better part of a century, state-funded schools have been the dominant institution in educating children. Nine out of every ten schools in the United States are funded by local, state, and/or federal taxes. In those nine out of ten schools, a similar proportion is mostly from local property taxes, which are based on a certain rate for each $1,000 their homes are worth. Some local districts are in dire fiscal straits, which leads to borrowing in the form of bonds and such to make up the deficits. However, local property taxes are the primary engine by which schools are maintained, teachers are paid, and textbooks are bought.

Local property taxes are raised locally and paid locally to local schools. If you live in a district with expensive homes, the district raises more money in property taxes and spends more on schools, teachers, and textbooks. If you're from a district with less expensive homes...well, you get the idea. Usually, there are only one or two schools close enough for a viable busing system to take students from their homes to school without costing the school too much money or take too much time to be realistic.

What do these transportation barriers mean? More or less, there are state-funded monopolies (or duopolies, as the case may be) in the market for education. Since only about 10% of schools are private, there isn't exactly a readily established infrastructure that can move in and build new schools quickly or easily to provide an alternative to the state-funded establishment. Now, I'm not knocking state-funded schools: I was perfectly satisfied with my Washington State K-12 Public School experience. However, I know that's neither the mood nor the experience of the aggregate; furthermore, simple satisfaction doesn't excuse the fact that we are talking about monopolies or duopolies here, and state-sanctioned ones at that.

There is only one other situation where the government can get away with something like a state-enforced monopoly: patents. In reward for developing something manmade, unique, and useful, the government allows an inventor a 20-year state-protected monopoly on a product. This reward is a temporary, direct recognition for one inventor's efforts. Public schools are permanent, indirect recognition for the efforts of progressive reformers a century prior. Put in that context, do public school officials really deserve the monopoly/duopoly that they've been granted by the state?

To be fair, public school officials don't directly gain "monopoly profits"; public schools, after all, don't obey the typical monopoly firm's returns. That being said, think of the non-monetary rewards: no competition from other schools (except in very rare circumstances), no incentive to develop a better product, or to cater to their "customers," or to cut costs...the list goes on. Industrial organization economists have entire models to describe efficiencies within public agencies - from the few I've seen, they aren't particularly flattering.

Getting back to the previous question - do public school administrators really deserve the security of a monopoly/duopoly situation they find themselves in? The straightforward answer is, of course, no. No one deserves complacency that they didn't earn.

After all this, what is the solution to low standardized test scores, expensive schools, large class sizes, a dearth of math and science excellence, and a lack of choice for parents and children?

The simple fact is that I can supply no certainties, only inferences. I've always mused upon just what would happen if every public school were sold at auction tomorrow. Think about what might happen: suddenly, there would be a rush (relatively speaking: it takes at least a year to build a new school, if not two or three) of new schools in upper-class neighborhoods, to maximize the profits from the high prices that wealthy parents would doubtless pay for their children to be educated. With new schools, suddenly there's a demand for new teachers. There aren't nearly enough teachers to satisfy the huge number of schoolkids; has anyone not read a news story about a school district that needs more teachers? They should honestly be making a whole lot more than they are now. In the short run, teachers should be making a whole lot more money. In the long run, more kids will see the high salaries teachers would/should be making and go into teaching, raising the supply and depressing the wages. As the cost of labor (teachers) falls, the costs of new schools falls accordingly, and suddenly it's profitable to open schools in poorer districts, opening the doors of oppurtunity for more and more kids at a sustainable rate without being a drain on state budgets. Of course, a plan like this would also deprive the state of an enormous revenue-raiser: with privatized schools means that the rationale behind property taxes is eliminated.

The story mentioned above is not foolproof, nor is it something that can happen overnight. Transitions like this are difficult and I have no simple plan for the students that are lost in the transition, nor can I make any guarantees for the finished product. Will privatized schools teach students better, or will they simple cut costs by hiring unqualified teachers? I hope against hope for the former, but I worry about the possibility of the latter.

This kind of experiment is not something that could be experimented upon easily; a large region would have to be entirely privatized and given enough time for competition to change school administration culture significantly in order to show some progress and I doubt that politicians are willing to wait that long. Statesmanship, not politics, is situated for the long term, and precious few statesman are in office nowadays.

Until we elect a few statesmen - or at the very least a few muster the courage to run for office and win - we'll have to settle for hypotheticals. The intellectual exercise is stimulating, but it simply won't satisfy the way decisive action will.