Competition and eu-competition is the lifeblood of emergent order

In a recent Freakonomics podcast encore, host Stephen Dubner explores How a Bad Radio Station is like our School System.

About 5 minutes into the podcast, Dubner asks Joel Klein, former chancellor of the New York City Public School System, why the standard model of education — “25 students in a box” — hasn’t changed.

I found Klein’s answer interesting:

How many psychiatrists does it take to change a light bulb?  The answer: Only one, but the light bulb has to really want to change.

And the answer to your [Dubner’s] question is that the school system really does not want to change.  It wants more resources.

What I found interesting about Klein’s answer is that it describes organizations in general, not just education.  Businesses, charities, churches, clubs, families, associations and government organizations, once established, do not really want to change and they want more resources.

A common discussion is why private is better than public — why a business or private charity is better than a government program, for example.

For me, it’s not so much the private/public distinction that matters.  It’s the degree to which the organization is subjected to competition or eu-competition.

Aside:  I’m using eu-competition for lack of a better word (there may be a better word that’s just not coming to mind.  Let me know if you can think of one).  I got this idea of using the eu- prefix from this EconTalk podcast with Mike Munger where he talks about eu-voluntary trades.  These are trades that are voluntary, but one side has considerable more leverage than the other.

My term, eu-competition, means organizations that aren’t directly competing head-to-head with one another, but can benefit from discoveries and innovations made by other organizations.

For example, the political left often holds up fire departments as examples of good socialism at work, as if being funded by taxes is the only dimension of socialism.  What folks making this argument fail to consider is that fire departments operate in a eu-competitive environment.  While fire departments don’t compete head-to-head with each other for resources, they don’t answer to one centralized Federal Department of Fire, either.  And there are many fire departments that operate relatively independent of each other.

This means that there is greater natural likelihood for things to be done differently from one fire department to another.  For the most part, one way isn’t necessarily better than another.  But, every once in a while a fire department happens upon something that is better and before long, other fire departments can choose to adopt it if they too find that it can help.

I think what Klein said about education is true about most organizations — they are systems that don’t want to change.

K-12 education hasn’t had to change.  K-12 education is similar to the fire department example in my aside above, there are many school districts.

But, there is an important difference.   How K-12 education is operated is much more nationally centralized than how fire departments operate.

There is a Federal Department of Education that, as Arne Duncan, the current head of this department, admitted in the same Freakonomics podcast, has acted as a “compliance bureaucracy”.   This Department has the power of accountability through purse strings.  And, if it happens to be holding K-12 school district accountable for not changing, then they won’t change.

Further, there is a body of “education experts”, that have implicit power that they exercise through the Federal Department.

Also, people in general, believe in the one-size-fits-all education model.  I often hear people, even though they complained while going through K-12 of being forced into a box that didn’t fit them, say things like “we just need one standard and it needs to be a good one.”

So, education hasn’t really had the competitive and eu-competitive environment in which to change and evolve through natural experimentation, discovery, innovation and voluntary adoption of changing standards.

Almost every other organization — local government organizations, families, libraries, charities, clubs and businesses — operate in competitive and eu-competitive environments that do better counter act the resistance to change inherent in every organization.

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2 thoughts on “Competition and eu-competition is the lifeblood of emergent order

  1. As an aside, the European Union – my local EU – uses its own definition of competition. Good article.

  2. Pingback: The Global Search for Education: A Look at New York Public Schools «

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