Armchair Economics - The Failure of the American Education System and the Ultimate Solution

One of the biggest issues we hear about all the time is the failure of the American education system to produce successful passing rates and actually give our children a quality education within a quality environment and facility. The main problem is that the government subsidizes the producer, not the consumer. In this case, the producer is the school, and the consumer is the student. Let me explain.

When the government pays for public schools, they generally provide the minimum amount of funds necessary to build the school, which is why you see schools that are basically dumps on the nightly news. The system demands that a child attend a particular public school based on where he or she resides, disabling them from being able to choose to go to another school for a potentially higher quality of education.

If government subsidized the consumer side of the market for education, if they gave money to the student, he or she would be able to choose where to go to school. Obviously the child and the parents thereof would want to choose the best quality school with the best teachers and the best facilities; this would create competition. Schools would compete to meet the needs of the student in the best way. Quality and quantity would be ensured across the board, as subsidizing the student would provide an incentive for schools to work to outdo the other schools. As such, prices would be forced down as low as the competition would allow, and the quality of schooling would skyrocket consequently.

This form of system would also enhance credentialism and meritocracy for teachers and students, which would further improve the quality of the education and learning environment provided. The current educational system causes many students to drop out before even completing high school, thus condemning them to low-income jobs and an overall lower standard of living. Everyone in society is worse off as a result. Illiteracy is widespread. For this reason, the educational system should be largely privatized. The parents and their kids must be free to choose the school, not the other way around.

A privatized educational system would also significantly reduce poverty by allowing the poor and those in parts of town that are forced to go to the 'inferior' school to achieve better quality schooling than they currently receive. Some parents still hold that their child's public school is "good," but that's simply because they don't know the alternatives, or because we've lowered the standardized rating of test scores across the board. But when the real test, the international test, is implemented, the truth comes out. When put up against 41 other countries, American students do just as well...up until the 4th grade. Then, from the 5th grade on, American students score far less than the other countries that spend much less on education than we do.

Privatizing education would also increase the salaries of teachers who try hard - credentialism and meritocracy, again. In terms of basic principles of economics, it's all about incentives. Pay would be based on productivity. That is, a great teacher will be paid more than a poor teacher, or the poor teacher will simply be fired to be replaced by a more qualified teacher. This gives the teachers an incentive to further their own education and qualifications. If the teachers know more and are better at teaching, the students learn more, and are able to ascertain higher paying jobs that require more skills, which the students will then have as a result of their higher quality of education, thus society as a whole becomes better off. Do you see the pattern here?

If the school is autonomous, it is free to hire and fire and choose and try out new things and experiment to get the best results possible. One myth is that the schools are "underfunded." That's all we hear nowadays. But with an average annual spending of $10,000 per student, which results in about $200,000 per classroom of 20 students, 3 or 4 teachers could be hired! Per-pupil spending has more than doubled in the last 30 years, while test scores and graduation rates remain flat.

It has been shown time and time again that private, alternative, charter, and independent schools do far better and cost far less than the highly bureaucratized government schools. Private systems like Sylvan Learning flourish. Public schooling cause some parents to go to the black market for their child's schooling and break the law by falsifying their residential address just to attempt to get their son or daughter a better education. The aforementioned countries that beat America in the international tests do allow the parents and students to choose, and they do much better and get a much better education as a result. Those countries don't leave any child behind, while America leaves many behind.

People have choices in many other areas, like what cell phone plan to get, or what food to buy, or what brand of computer to buy. Why not allow the same choice for education? The highest level of dissatisfaction and the subsequent inefficiency occurs at monopolies and government institutions, like motor vehicle departments and post offices, where there is really no incentive for the producer to 'perform.' Without competition, nothing really gets done. This concept applies to the education system just as much.

Teachers all across the board get paid the same independent of whether or not they are good teachers. The unionized teachers' contracts make it nearly impossible to fire most teachers, so they get away with many things that society and parents frown upon. Unionized monopolies ultimately fail. The education union does not allow the necessary changes to occur, and students suffer greatly because of it. Competition increases quality, quantity, and sustainability, and makes everything better.

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Best,
Tyler