Here’s Why Competition Doesn’t Work in Public Education

If you are (1). interested in public education and (2). living with an Internet connection, you are likely to already know that North Carolina’s Republican-led legislature has passed a TON of new legislation in the past few weeks that have educators more than a little riled.

(See here for a quick primer)

I’ve spent some time reading the comment sections of education stories appearing in the local newspaper (see here) and the strand that seems to resonate the most with readers is the suggestion that introducing competition to the public education system — achieved here in North Carolina through vouchers and charter schools — is the only way we can kick start stalled schools.

That’s a common refrain in thinking around education here in the States, isn’t it?  We automatically believe that because competitive risk — having to stand out in a marketplace by constantly producing better products — moves businesses forward, the same strategies will move schools forward too.  To suggest otherwise is seen as downright Un-Amurican.

So let’s take a close look at how competition works and then decide if it really IS right for schools.

When businesses compete, their first step is to identify the marketplace that they are trying to serve.  Their second step is to figure out just how much money they have to spend in order to make a profit in that marketplace.  Profitable businesses spend just enough to keep their primary marketplace happy.  Spend more than you need to and you are essentially giving profits away.  Spend less than you need to and you won’t carve out a space in the marketplace that you are trying to serve.

Here’s a practical example of what that looks like in action:  My wife and I bought a new refrigerator a few months back.  To be honest, we were blown away by the full range of refrigerators available in the local Home Depot.  There were stainless steel units with huge capacities, interesting configurations, and four different types of ice dispensed automatically standing alongside basic units made from cheap plastic, ready to do little more than freeze your cheese.

You see the competitive lesson there, right?

Real-live apple-pie eating, baseball loving American businessmen are trying to carve out a space for themselves in SPECIFIC markets, producing refrigerators for certain KINDS of customers.  Some — like Subzero — are producing high end refrigerators for people who own $500,000 homes and are ready to drop a few grand on top end appliances that will serve as centerpieces in their kitchens.  Others — like Kenmore — don’t even bother with the bells and whistles, instead focusing their attention on developing functional-but-not-fancy machines for people like you and I.

And then there’s guys like Joe — the landlord who showed up in my driveway when he noticed the delivery truck bringing our new refrigerator to our house.

Hey — have you got an old unit you’re trying to get rid of?  I’d be happy to take it off your hands,” he said.  I told him that he wouldn’t want my refrigerator.  It was 20+ years old, had been sitting unplugged in my backyard for about two weeks, had been rained on three times, and barely kept anything cold anymore.

That don’t matter,” he said.  “I rent houses out in the poor section of town.  As long as it blows a little cool air, those people will be happy.  I’ll give you $50 bucks and haul this thing away right now.”

Joe has figured out competition, hasn’t he?  He’s identified a marketplace — “those people in the poor section of town” — that no one is serving.  Then, he’s figured out just how much he has to spend to keep his customers happy.

He’s not putting Subzero machines in his rental houses — heck, he’s not even putting WORKING machines in his rental houses — because his customers wouldn’t expect those machines to begin with.  Turning a profit means putting the cheapest refrigerators that he can find into his properties in the poorest corners of town.  He would never slip a rotting machine in a home that he planned to rent to you or I, but he’s not renting homes to you or I.  He’s renting them to people who are down on their luck.

Cheap and crappy will do just fine.

The capitalist in me sees nothing wrong with Joe’s choices, y’all.  While I feel bad for the people living in his homes, the refrigerators owned by other people aren’t something that I’m ready to lose sleep over.  We really DO live in  dog-eat-dog world where, for a variety of reasons, some people are going to get ice sliced and diced while other people are stuck struggling to make ice at all.  Whether we like it or not, that’s life. It’s not society’s job to make sure that everyone has the refrigerator of their dreams.

Translate that lesson to schools, though, and competition gets ugly.

If we REALLY encourage competition in education — if we really ARE committed to letting private companies drive our public school systems — businessmen will bring those same profit-making practices to our communities.  Tapping into an affluent marketplace with a ton of disposable cash to burn, some entrepreneurs will develop Subzero schools with all the bells and whistles.  There will be small class sizes, highly skilled teachers, and a heaping cheese-load of resources spilling out of every classroom storage closet.

But make no mistake about it:  The entrepreneurs developing schools for “those people in the poor section of town” will take Joe’s approach to making a buck.  Their buildings will be stocked with cheap supplies and unqualified teachers. The only thing spilling out of their classrooms will be kids.  Like the good businessmen that they are, they’ll stick worn out Kenmores into poor communities — cutting their expenses to the quick regardless of the quality of the product they are producing because they know full well that the marketplace they are serving can’t afford anything better.

You DO see the problem with this approach to education, don’t you?

While the quality of other people’s refrigerators doesn’t affect ME in a deep and meaningful way, the quality of their education most certainly does.  Ensuring that ALL children — including “those people living in the poor section of town” — have access to Subzero schools means ensuring that ALL children will grow up to be competent citizens ready to make positive economic and social contributions to our communities.

That’s an outcome we should ALL care about — capable neighbors really DO fuel economic growth and ensure a healthy future for everyone — but it’s an outcome that competition doesn’t automatically advance.

#nuffsaid

_______________________

 Related Radical Reads:

Living a Silent War

Staffing High Needs Schools

What Parents Don’t Understand About High Poverty Schools

Lessons Learned from the LeBronathon

 

 

 

 

 

6 comments

  1. Chris Kennedy

    Bill,

    Thank you for this concise, well-argued post. This is a brilliant illustration of why “competition” in education does not guarantee improved outcomes for all students.

    I have made a similar comparison to what will happen if we continue down this road of privatization/vouchers/charters, which is that we will develop a two-tiered educational system just like there is a two-tiered health system in this country. Those that have insurance, or can afford to pay, enjoy quality health care from private providers. Those that do not, or cannot, rely on public health assistance from local health departments for the most basic care.

    Something similar would likely happen in education, in that those with access to vouchers (or who can make up the difference in cost of private education with voucher assistance) or charters will occupy one level of education. Meanwhile the second tier will mostly be occupied by the disadvantaged, and public schools would look very much like public health departments in the quality of service delivery, which is at the most basic level. This is clearly not what most state constitutions that mandate public education call for or expect. I truly hope it is not our future.

    • Bill Ferriter

      Chris wrote:

      Something similar would likely happen in education, in that those with access to vouchers (or who can make up the difference in cost of private education with voucher assistance) or charters will occupy one level of education.

      – – – – – –

      And what’s truly evil, Chris, is that companies that provide education outside the public system know this full well too — and they’ll set their basic tuition JUST high enough that struggling students from disadvantaged neighborhoods CAN’T afford the difference between the voucher and the full tuition.

      The result will be droves of middle to upper middle class kids and families — read: kids that are often times WAY easier to serve — taking advantage of a private school tuition that is now within reach with vouchers and kids that have real challenges being left behind in the underfunded public system.

      In business terms, it’s maximizing your profit margin: Charging a higher rate to serve kids who need less support means spending less and making more.

      It makes me sick ESPECIALLY because I think there are more than a few legislators who know FULL WELL what they are doing.

      Rock on,
      Bill

  2. John Wink

    Competition is great in the marketplace, but there is a drawback. Competition creates winners and losers. While I know that my children must live in this world to make ends meet, I don’t want my child to receive a losing education. What I mean is that education is the foundation for every child’s future which means that every child must receive a winning education to thrive in the 21st century.

    Charters, vouchers, etc diverts $ from the very institutions that are winning and will eventually make them losers. What’s worse is that states have underfunded schools repeatedly for years and then demonized them as failing because of one test on one day. This attack on public education will continue until we have legislators that desire to create win-win systems for making education a priority for every child.

    Enjoyed the post & hope you like your new refrigerator.
    John

    • Bill Ferriter

      Hey John,

      I love the notion that in education, we need to commit ourselves to ensuring that every child gets a winning education. That’s a simple concept that anyone (except maybe Tea Party hacks) can get their heads wrapped around.

      As far as charters go, I’m not actually opposed to them AS LONG AS they work as a complement to the public school system. The notion of having “incubator schools” that can try out new concepts on a small scale and that might be able to identify potential lessons that can be translated to the larger system is a good one.

      Sadly, I don’t think that’s what the majority of legislators in our hard-right leaning state see charters as.

      Sure wish that everyone had the best of intentions for children. Being a professional educator would be WAY easier if I didn’t have so much doubt for the people making #edpolicy decisions.

      Rock on,
      Bill

  3. Jeff Delp

    Great piece Bill! Arizona has similarly adopted the philosophy that public schools and charters can coexist. In a state that struggles to adequately fund education in the first place, the explosion of charter schools has only further divided an inadequate education budget. Make no mistake, several of the Arizona charter schools are high quality schools — and open to anyone (if space is available). I am certain they employ great teachers, and people who care about kids. However, “choice” assumes that students have someone who will advocate for them. Someone who will take the time to investigate alternatives, fill out applications, transport them to and from school, etc. I worry about those kids who don’t have advocates, or those whose parents, for whatever reason, are unable to do these things. What happens to them when the local public school is stripped of adequate resources to meet their needs?

    Just my two cents…

    ~ Jeff

    • Bill Ferriter

      Jeff wrote:

      I worry about those kids who don’t have advocates, or those whose parents, for whatever reason, are unable to do these things. What happens to them when the local public school is stripped of adequate resources to meet their needs?

      – – – – – –

      And the evil conspiracy theorist in me, Jeff, thinks that this outcome is EXACTLY what many of the legislators in our country who lean the furthest to the right WANT to happen. As more resources are ripped away from public schools, the “public schools are failing” narrative they are painting will be confirmed and more support will be built for privatization of public schools.

      Now, if I truly believed that private industry would treat every community equally when developing alternatives to public schools — if I truly believed that kids in poor communities would have access to the same kinds of schools as kids in rich communities — I wouldn’t mind privatization of public schools at all.

      But what’s likely to happen is exactly what happened in my refrigerator experience. Different schools will be available to different kids living in different marketplaces. Some will go to beautifully equipped buildings and others will get nothing more than a McEducation. Businesses have no interest in providing an equitable educational experience. Their interest is in turning a profit.

      Profit changes everything in a private system.

      (Can you tell this has me a little fired up?!)

      Bill