Free markets, choice and charter schools

In a nutshell, here’s my philosophy on how well the free market solves problems: It works exceedingly well when the proper conditions are in place, but it does not work well in all circumstances.

What you need for the free market to work properly:

Transparency — Consumers have enough information to compare suppliers;

Consumer ease of switching — If you don’t like one supplier, it’s pretty easy to make a change;

Sector ease of entry — If existing suppliers are not meeting consumer needs, it’s possible for others to enter the market within a reasonable timeframe.

Some sort of mechanism to handle abuses by suppliers.

So, there’s a difference between eBay sellers — a sector that meets all the requirements above — and local hospitals, where someone who calls an ambulance typically doesn’t have much choice as to what local hospital they’ll end up in (with the possible exception of high-density medical areas in Boston). This is why I am a big proponent of private-sector competition in, say, Internet retailing yet do not believe in for-profit local hospitals.

In fact, if there is a hospital sector where free-market private-enterprise competition might make sense it would be among world-class hospitals in Boston where consumers tend to have more of a choice and the ability to do research when deciding where to go for treatment of a serious condition that is not an immediate medical emergency. And, it’s rather telling that there are no for-profit entities that are trying to compete with Mass General and Brigham & Women’s. (I know the medical sector has its own enormous issues that I’m not addressing, but I’m trying to stick to free-market issues here).

Which brings us to education. Does primary and secondary education meet the free-market test?

Transparency? Trying to measure schools by median test scores is a joke, sorry all you MCAS fans. By definition, students in a charter school will, *on average*, have parents who are more engaged in their children’s educational outcome, and IMO that’s the single most important factor in a young student’s success. Not to mention the student body in a charter school often differs in substantial other ways with the student body in your average urban public schools. There are schools that constantly get an influx of new immigrant kids who are included in test scoring soon after arrival and other schools that have a more stable student body. And on and on. But finally, I personally do not believe that average standardized test scores accurately measure quality of education, although I suppose it does measure administration creativity in terms of how to classify students.

Ease of switching — in theory, I suppose parents can pull their kids out of one school and move them to another if they’re not happy. In practice, unless the student is remarkably unhappy and has no friends in the current school, how often is that going to happen?

Sector ease of entry — Nope.

Consumer redress for shoddy service — Not sure how that goes for parents. For those of us footing the bill — that is, taxpayers — there is some limited ability to affect direction and budgets for schools depending whether you live in a city or town; but for a charter school, it’s zero. The charter school gets to take my money and pretty much do whatever it wants; I’ve got no say at all. I’m not OK with that, period. If people think there are problems with the public schools, fix the problems in the public schools. Don’t ask me to fund a parallel school structure that decreases efficiency and gives me no say in how that parallel structure functions. My obligation is to make sure that children in my community get an education, but that does not extend to serving as an ATM for education experimentation.

If anything, post-secondary education has more of the free-market conditions in place than high school does: students & parents can better compare alternatives, and typically since the geographical area is wider there’s a lot more choice and college students are more likely to switch schools to find a better program than elementary school kids (at least the ones I know). How is the free market working out for that sector? College costs are rising way faster than the overall inflation rate. What does that tell me? The free market is not working all that well for post-secondary cost containment, even though there are public, private non-profit and private for-profit options that seem to meet some of the general conditions for a free-market solution. And *that* makes me rightly skeptical that charter schools are going to do anything to solve the problems of quality and cost for elementary and secondary education when those sectors have less of the needed factors in place than post-secondary.