Understanding How Educational Freedom Improves Education

Richard Rothstein is concerned that

If we deregulate the teacher market, we will undoubtedly attract some very high quality teachers who might not have made it through the certification hoops. We will also attract some incompetents, who will do serious harm to our children. How many of the latter are we willing to tolerate in order to gain the benefits of the former?

My response to this is that we first have to acknowledge that we have already attracted numerous incompetents, who are already doing serious harm to our children. Indeed, based on thirty-five years of stagnant NAEP 12th grade scores, the devastating data on adolescent well-being, and graduation rates below 50% in many urban districts, I should think that Rothstein should be horrified at the serious harm we are already doing to our children. For decades we’ve known that education majors are among the lowest scoring academic majors at universities. We’ve created a system in which the intellectual development of our young people is supervised by one of the least intellectually capable category of college graduates in our society, and Rothstein is concerned that without the education degree “we will attract some incompetents”?

The human resources director of a large urban district, who had previously been a great principal, once explained to me that his job largely consisted of dealing with teachers who came to work drunk. In a district with 30,000 teachers, about one came to work drunk every day. And then there are the infamous “Rubber Rooms” where NYC places its hundreds of incompetent teachers whom it can’t fire, costing the district tens of millions per year. And we can all look forward to the results of the “Ten Worst Union-Protected Teachers” contest. I know it is unseemly to point out that there are now numerous incompetent teachers, but I have known hundreds of students whose lives were “seriously harmed” in the existing system, including attempted suicides. Many young people experience school as a degrading prison, and occasionally the teachers are part of the problem.

The salient question is will we do more harm, on average, allowing parents and students greater decision-making powers in education than we are already doing. It seems unlikely that parents and students would do much worse and highly likely that they will do far better over time once we have created a competitive education market.

There are several features of a prospective competitive market in education that seem to confuse some observers. First of all, education is often somewhat of a natural monopoly in many places; insofar as families have to bear the costs (in time and money) of transporting their children to non-neighborhood schools, there is often a significant implicit tax associated with all but the geographically closest schools. As a consequence, most local education markets are oligopolies rather than competitive markets.

In order to overcome the quasi-natural monopoly of local schooling, we need national educational chains that compete for the opportunity to create new schools, with national brand-name appeal and associated capitalization and focused R&D to support their particular brand advantage. KIPP, Green Dot, and others are the beginning of this trend, but they are all still developing their ability to bring quality to scale. John Merrifield explains why large scale school choice is a crucial prerequisite to reaping the benefits of innovation and how the few existing choices are largely irrelevant.

Second, existing public and private schools with campuses have an enormous competitive advantage over new charter and private schools that have to pay rent or mortgage costs, often allocating 10-20% (or more) towards their facility. Thus except for those few states that allocate capital budgets for charter schools, new charter schools must pay for their teaching staff with a state per-pupil allocation lower than the public schools and then subtract from that facility expenses that are typically paid for through bond measures. Established private schools may have campuses that were donated many decades ago or that were paid for through capital campaigns which are only possible due to an extended alumni base. In effect we have a local oligopolies with existing “firms” highly subsidized relative to new market entrants.

Thus in evaluating the performance of charter schools on average, one should note that not only are they educating a more at-risk population, they are also doing so with less funding. Bringing charter schools to full funding parity with government-managed schools, including capital costs, will help to advance the rate at which charter schools succeed and create a competitive environment.

The third feature of the existing education system that prevents an innovative market from developing is the fact that the government system acts as a dominant operating system, similar to that of Microsoft, but with a higher market share that is legislatively financed and enforced. Because of requirements such as teacher certification, statewide textbook adoptions, and state standards in curriculum and testing, it is difficult and costly for any single school to create and finance an alternative. We will need large chains with their own R&D budgets with freedom to create their own educational system in order to receive the ultimate benefits of choice.

It is worth examining the discrepancy between the research community’s understanding of the dynamics of school innovation by means of markets vs. the entrepreneurs’ approach to innovation. Let’s examine teacher training as a case in point.

When I read Rothstein’s note that “nobody yet understands teacher quality well enough to make coherent proposals for reform,” I am reminded of the extraordinary statist biases of the research establishment. What he means of course, is that none of those academic researchers sifting through data “understands teacher quality well enough.” It is simply not true that “nobody” understands teacher quality. Those entrepreneurs who discover “teacher quality” appropriate to their academic programs will find the “teacher qualities” they need to support their programs. (For instance, I almost always avoided education majors and preferred to hire liberal arts graduates, lawyers, business professionals, etc.)

In order to understand how absurd Rothstein’s notion is (though he is in the good company of the entire educational research establishment), note how bizarre it would have been for academic researchers in computer science or business management to attempt to have established “coherent proposals for reform” that would have identified the entrepreneurs who created the IT revolution. Picture, if you will, thousands of earnest academics holding conferences and publishing papers on the credentials needed to identify “qualified” IT professionals in 1970. One simply doesn’t discover people like Steve Jobs and Steve Wozniak or Linus Torvalds by means of top-down academic research.

To take a different example, most European nations have state-supported churches and very little church attendance. The U.S. has instead a vibrantly entrepreneurial religious sector and is, not coincidentally, the only developed nation that has remained intensely religious. Imagine, in an alternative universe, thousands of earnest European research scholars sifting through the data on existing church attendance in Europe in an attempt to discover “coherent proposals for reform” that would increase religiosity. They would never find the Joseph Smiths, William Seymours, and Billy Grahams that have created and sustained much of our religiosity. Seymour, a former slave, created Pentacostalism in 1906; today there are now estimated to be more than half a billion adherents globally, and nearly 20 million more every year. One doesn’t analyze the data to find the qualifications needed to create a successful church. Why should we expect the data to reveal who is qualified to create a successful school?

As Hayek explained long ago, competition is a discovery process. In order to allow parents the opportunity to discover the right teacher quality standards, we need to create a level playing field through which various educational entrepreneurs will select various kinds of teachers. If their organizations are large enough, and if we can break the existing government school certification standard, these entrepreneurs will be able to provide customized training programs that are increasingly suited to the needs of the parents and students they serve. Existing academic teacher training programs will largely become obsolete.

The notion that researchers are going to discover “teacher quality” is itself part of the problem. The fatal conceit that professors analyzing data can discover “teacher quality” is exactly analogous to the fatal conceit that the government analysts can create a five-year plan that produces enough shoes or tractor parts. In a dynamic entrepreneurial market, the relevant information is always intimately entwined with the particular vision of a particular entrepreneur in a particular place appealing to a particular demographic. In order for learning to be as dynamic and alive in the U.S. as is religion, we have to let educational entrepreneurs define their own quality standards, and let parents and students decide what “quality” is.

Stern regards the possibility of significantly better education as utopian, and has decided that government imposed standards are a more pragmatic path. It may be that, occasionally, some improvements result from the approach that he advocates; even the Soviet Union had a few successes here and there. But as Lisa Snell at Reason points out, the Massachusetts Miracle lauded by Stern has resulted in a large and increasing gap between low-income and high-income students. This is no more inspiring than Rothstein’s cheerleading for NAEP longitudinal score growth in which 4th and 8th graders improve but 12th graders get worse.

It seems especially odd that Stern should consider unlimited charter school growth to be “utopian.” A survey done and marketed by PDK, staunch public school advocates, shows that from 2000 to 2007 support for charter schools increased from 42% to 60%. More significantly, the rate at which public-school parents are coming to favor charter schools (up 23 points) is growing even more rapidly [pdf] than that of those who do not have children in school (up 16 points). When given an opportunity, even union teachers are desperate to escape to charter schools: When the United Federation of Teachers opened up their first charter schools in NYC, they received 1561 applications for 27 positions. In L.A., it was reported that nearly 700 union teachers had applied for leaves of absence to teach in mostly non-union charter schools, and only 176 had returned. As one such teacher explained, “I felt like a spark trying to ignite that kept sputtering out.” It is thus only mildly surprising that Barack Obama has openly endorsed charter schools. When the leading candidate for the teachers’ union party openly supports charter schools during a hotly contested primary race, unlimited charter school growth can hardly be considered “utopian.”

Max Planck is credited with saying “Science progresses one funeral at a time.” As bit-by-bit we continue to get more educational freedom through diverse small victories, the old romance with government-managed schools will continue to decrease. As bit-by-bit these small freedoms result in a few more improvements, the trends will accelerate. At some point we will have our Berlin wall moment, and the long reign of government-managed schooling will collapse. And finally we will experience a “Silicon Valley of Education,” in which many thousands of educational entrepreneurs compete to provide constantly improving forms of education to diverse niches.

But change will not come from those who research education, because they are always taking a frozen snapshot from two years ago, and arguing against greater freedom because they have not yet identified how to do it right going forward. But the vast majority of researchers have never been the change agents, nor are they likely to discover the change agents, nor are they even very capable of understanding the full set of conditions required for change agents to flourish.

It is endlessly odd to me that advocacy for innovation, or the conditions required for innovation, should be considered ideological. It is endlessly sad to me that education, where innovation is most needed for improving human well-being, is the realm in which there is the most dogged opposition the conditions needed to innovate. In every realm of human endeavor, allowing millions of people the opportunity to discover their own solutions, and create institutions devoted to the ongoing development and dissemination of those solutions, has out-performed management by politicized government entities. Schooling is the one stronghold in which, oddly, even many conservatives continue to believe that government can do it better.

Steve Wozniak, who spent years teaching in public schools after founding Apple and becoming wealthy, concluded

… schools close us off from creative development. They do it because education has to be provided to everyone, and that means that government has to provide it, and that’s the problem.

Wozniak is not an ideologue; he is a brilliant, generous innovator with great integrity. If government provides schooling, it can’t be innovative as an institution nor can it encourage our children to be creative. The sooner the next generation realizes this, the sooner we will no longer be a nation at risk.

Also from This Issue

Lead Essay

  • A Nation at Risk” Twenty-Five Years Later by Richard Rothstein

    Twenty-five years ago this month, a Reagan-appointed blue-ribbon committee published a blockbuster study, A Nation at Risk, about the sorry state of American education. In this month’s lead essay, the Economic Policy Institute’s Richard Rothstein gives his critical assessment. “In 1983, A Nation at Risk misidentified what is wrong with our public schools and, consequently, set the nation on a school reform crusade that has done more harm than good,” Rothstein writes. “The diagnosis … was flawed in three respects: First, it wrongly concluded that student achievement was declining. Second, it placed the blame on schools for national economic problems over which schools have relatively little influence. Third, it ignored the responsibility of the nation’s other social and economic institutions for learning.”

Response Essays

  • The Freedom to Innovate and the Future of Education by Michael Strong

    In his reply, education entrepreneur Michael Strong challenges Rothstein’s key claims about the success of public schools and their relative unimportance for the further economic advance of the poor. He argues that the attachment to the status quo system of public education is “irrational.” Drawing on his experience as the principal of a successful charter school, Strong emphasizes the importance of the freedom to innovate. “The first nation that creates an educational system that allows educational entrepreneurs significant freedom to innovate will, over time, develop a significant advantage in the global marketplace. I’d prefer that the United States lead this movement rather than follow it.”

  • A Tale of Two Rothsteins by Sol Stern

    The Manhattan Institute’s Sol Stern detects “two Richard Rothsteins.” The first praises the public schools for improving student performance and for narrowing inequalities in student achievement. The second argues that nothing further can be done by the schools; for added progress we need other forms of social and political reform. “Either schools are able to significantly overcome family and neighborhood deficits that children bring to the classroom (and therefore ought to be judged by that standard) or they cannot be expected to overcome the social and economic deficits,” Stern writes. “But [Rothstein] perversely insists on having it both ways.” In stark contrast, Stern argues that test scores have become worse, that schools bear the responsibility, but that they can improve through a regime of standards.

  • Where Do We Go Now? by Frederick Hess

    Frederick Hess, the Director of Education Policy Studies at the American Enterprise Institute, concedes the premises of Richard Rothstein’s argument but contests their implications for the future of education. According to Hess, the key failing of A Nation at Risk was its too-easy acceptance of “the familiar institutions and practices of K-12 schooling.” As a consequence, the nature of teaching and teacher education has barely changed, despite deep changes in the broader labor market. And even the school choice movement has fallen victim to “the dangers of trying to paste preferred policies atop existing arrangements.” Hess concludes that “we must reject both excuse-mongering and overwrought hyperbole in favor of a steely willingness to revisit the shopworn assumptions and tired verities that have so long characterized school reform on the left and the right.”

The Conversation