Why School? (2010 Update)

(A modified version of a communication to a reporter for Civil Beat)

When John Waihee occupied Washington Place his Lieutenant Governor, Ben Cayetano, coordinated meetings of a group called the Commission on School Governance. At that time (c. 1993) Lt. Gov. Cayetano said: "We cannot afford to waste another generation of school kids." A school generation is 12 years. Since 1993 we have wasted a generation of school kids.

Anyone interested in school system performance will benefit from reading the Brookings Institution study by John Chubb and Terry Moe, Politics, Markets, and America's Schools (1991, originally entitled "What Price Democracy? Politics, Markets, and America's Schools") and the Brookings/Urban Institute/Committee For Economic Development study Vouchers and the Provision of Public Services (2000, C. Eugene Steuerle, et al. eds.). The latter discusses a variety of industries from national, international, and abstract perspectives at various of levels of abstraction. Some of the essays require the economic and mathematical expertise of a specialist in tax policy while some essays are quite accessible. The brush-clearing introductory remarks on "public goods" in E.G. West's "Education Vouchers in Principle and Practice; A Survey" (The World Bank Research Observer, 1997-Feb., online) provide useful background. West's "Education Vouchers in Principle and Practice (full report)" (online) combines theoretical analysis and empirical research. Joel Fried's discussion of "the agency problem" in "Pots and Kettles: Governance Practices of the Ontario Securities Commission" (online) suggests important considerations which apply across the board to discussions of the relative merits of State-monopoly providers and competitive markets in goods and services.

When Chubb and Moe designed their study of school effectiveness they ranked schools by student gains between 10th and 12th grade on standardized tests of Reading, Math, and Science (they did not use Social Studies because Social Studies scores did not correlate with anything, which is pretty funny if you know any statistics). They then looked for systematic differences between the top 25% of schools and the bottom 25% of schools. The largest difference was, as expected, parent SES. That is, student gains correlated strongly and positively with parent income. The second most influential variable was a composite variable which Chubb and Moe called "the degree of institutional autonomy". That is, the more people above the level of Principal telling the Principal how to do her job, the worse a school performed.

Consider this question: "From State (government, generally) operation of what industries does society as a whole benefit?", imagine either a dichotomous classification Likely/Unlikely or a continuum, highly unlikely (______.______) highly likely, and try to generalize some principle which generates the assignment or position of an industry in this scheme.

Eduardo Zambrano
Formal Models of Authority: Introduction and Political Economy
Rationality and Society, May 1999
Aside from the important issue of how it is that a ruler may economize on communication, contracting and coercion costs, this leads to an interpretation of the state that cannot be contractarian in nature: citizens would not empower a ruler to solve collective action problems in any of the models discussed, for the ruler would always be redundant and costly. The results support a view of the state that is eminently predatory, (the ? MK.) case in which whether the collective actions problems are solved by the state or not depends on upon whether this is consistent with the objectives and opportunities of those with the (natural) monopoly of violence in society. This conclusion is also reached in a model of a predatory state by Moselle and Polak (1997). How the theory of economic policy changes in light of this interpretation is an important question left for further work.
After the fall of the Soviet State the British poet and historian of that State, Robert Conquest, wrote that the West had insufficiently learned two important lessons: the limits to the amount of good that can be accomplished by organized force (the State) and the stultifying effects of bureaucracy, public or private.

"Deadweight costs of taxation" (see an online economics dictionary) considerations imply that State operation of most industry imposes greater costs than benefits. As Zambrano indicates above, "communication, contracting and coercion costs" determine the cost/benefit result from a welfare-economic point of view. When inputs and outputs are simple, when systematic expertise matters more than specific local knowledge, and when capitalization costs are high (e.g., structural steel, plate glass), a sufficiently large State may operate an industry at close to the cost/benefit level of an industry in the private sector. Since inputs to the education industry (each individual student's interests and aptitudes) vary enormously and outputs (the potential career paths graduates will follow in a diverse modern society) vary enormously, since capital costs are low, and since specific local knowledge matters more than (bogus) systematic expertise, the education industry is a highly unlikely candidate for State (government, generally) operation.

Separation of powers, federalism (local control), and the legal system of private property and contract law institutionalize humility on the part of State actors. No one has privileged access to divine inspiration. If a policy dispute turns on a difference in taste, numerous local policy regimes or a competitive market in goods and services allows for the satisfaction of varied tastes, while a State-monopoly system must inevitably create unhappy losers. If a policy dispute involves a matter of fact, where "What works?" is an empirical question which only an experiment can answer, numerous local policy regimes or a competitive market in goods and services will generate more information than will a State-monopoly enterprise. A State-monopoly enterprise is like an experiment wit one treatment and no controls, a retarded experimental design. The system of markets (title and contract law) calibrates the reward for improved answers to resource allocation questions to the urgency of the question and the magnitude of the resources involved.

Empirical research finds what the above theoretical analysis predicts. Abundant empirical, statistical evidence supports the following generalizations:
1. As institutions take from individual parents the power to determine for their own children the course of instruction and the pace and method of instruction, overall system performance falls.
2. Political control harms most the children of the least politically adept parents.

Why, then, is the government in the education business? This "why?" question has three interpretations:
1. The welfare-economic "why?".
2. The historical "why?"
3. The political science "why?".

In brief:

1. No good welfare-economic case exists for State operation of schools.
2. The policy which prevails across the US and which compels attendance at school, mandates tax support of school, and restricts parents' options for the use of the taxpayers' pre-college education subsidy to schools operated by State (government, generally) employees originated in religious intolerance (specifically, anti-Catholic bigotry) and the ambition of public-sector entrepreneurs like Horace Mann and Richard Armstrong.
3. The current system survives on dedicated lobbying by current recipients of the US taxpayers' $500 billion+ per year pre-college education subsidy.

The $500 billion+ figure seriously understates the cost to society of the policy which restricts the taxpayers' education subsidy to schools operated by dues-paying members of the NEA/AFT/AFSCME cartel. Additional costs include the lost improvements in educational methods and technology which a competitive market would generate and the opportunity cost to students of the time that they spend in school. The opportunity costs of student time in school include lost lifetime earnings, lower lifetime productivity, reduced longevity, and the cost of prison for the poor kids whose lives we trash.

It does not take 12 years at $10,000 per pupil-year to teach a normal child to read and compute. Most vocational training occurs more effectively on the job than in a classroom. State (government, generally) provision of History, Civics, and Economics instruction threatens democracy, just as State operation of newspapers and broadcast news media would threaten democracy (and currently help sustain totalitarian regimes in Cuba and North Korea).

If it is fraud for a mechanic to charge for the repair of a functional engine and if it is fraud for a physician to charge for the treatment of a healthy patient, then it is fraud for a school to charge for the instruction of a student who does not need our help. If "public education" is not an employment program for dues-paying members of the NEA/AFT/AFSCME cartel, a source of padded construction, supply, and personal service contracts for politically-connected insiders, and a venue for State-worshipful indoctrination, why cannot any student take, at any time, an exit exam (the GED will do) and apply the taxpayers' $10,000 per pupil-year subsidy toward post-secondary tuition at any VA-approved post-secondary institution in the State or toward a wage subsidy at any qualified (say, has filed W-2 forms on at least three adult employees for at least the previous four years) private-sector employer?

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