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.

Why should any student have to settle for an awful school?

Joel Klein, outgoing superintendent of New York’s public schools, writes in this weekend’s Wall Street Journal Opinion about the challenges and successes of education in a piece called Joel Klein: What I Learned at the Education Barricades.

I enjoyed this piece and highly recommend it.  One part I found outstanding, some parts I found interesting and unsurprisingly, there was some I disagreed with.  But, overall, I think Klein is getting very close to the right track.

First, here’s what I thought was outstanding.  Klein asks:

…why should any student have to settle for a neighborhood school if it’s awful?

I appreciate it when someone can boil down a long, emotional, difficult and complex debate to one simple question.  Why should any student have to settle for a neighborhood school if it’s awful?

I’m looking forward to using that in future discussions on education.  I think the reflexive response will be something like, if the other choices are worse, then it doesn’t matter.   To which a good response may be, I’d rather give the parents more power to make that decision rather than less.

Klein, then goes on to write:

The debate shouldn’t be about whether a school is a traditional or charter public school. It should be about whether it’s high-performing, period.

Okay.  Now, here’s where Klein starts to lose me.  These two sentences sound very good, no doubt.  Who would argue with those?

I agree that debating whether a school is high-performing is better than letting it continue to rot.  But, the problem I see here is that there are numerous ways to measure performance.  Many in the education field disagree on which is best.  I happen to think only one measure is valid and very few people agree with me.

The only valid measure of performance is how many parents would choose to enroll their kids in the school if they had full control over the decision.

I offer this revision to Klein’s statement:

The debate shouldn’t be about whether a school is a traditional or charter public school. It should be about whether parents are choosing to send their kids there and why or why not.

Klein ends with this:

To prevail, the public and, most importantly, parents must insist on a single standard: Every school has to be one to which we’d send our own kids. We are not remotely close to that today.

I disagree.

I’ll give Klein credit for being far better on this than most.  He almost has it. He has the correct accountable party: parents.

But, I think Klein misses on the desire to have every school be one we’d send our own kids to.

To me, that’s like saying every restaurant must be one I’d choose to eat at myself or every pair of shoes must be shoes I’d wear. With restaurants and shoes it’s easy to see that we have a wide range of preferences and needs and that’s okay. That’s evidenced by the abundance of shoe companies and styles.

It wouldn’t make any sense to issue Klein’s single standard on these or any other good or service that comes in a wide range of choices.

But, it is easy to imagine what would happen if we did.  It would be impossible to come up with a restaurant or shoes that would suit everyone.  We’d join political factions to make sure that the restaurants and shoes we preferred were available by pushing our agendas on everyone else and fights would break out.

Sound familiar?  It should.  That’s exactly what we have with public education now.  We’ve unnecessarily pushed education into the political arena and that’s caused most of the problems.

Do you want to fund education through taxes to ensure everyone has access?  Great.  But, why do we need government to run schools?  Why do we not want to give parents of school age children more power to choose where they send their kids to school?

I recommend the following revision to Klein’s standard:

Every school should be primarily accountable to one group: the parents who decide to send their kids to that school.

At most, our local education departments should function similarly to our local health departments.  They should help make sure the schools are safe, clean and have effective procedures in place for emergencies and keeping track of children.  Though, I could be convinced that service could be provided privately as well.

Really, we shouldn’t have to debate whether a school is high performing or not.  The parents should decide.  When a school doesn’t perform well enough, the parents will leave it and it will close.

We have to reset our expectations for education.  We have to trust parents to make the right choices for their kids.  Most will do a good job and markets will emerge to help parents with that just as markets have emerged to help us make better choices elsewhere as consumers.

We won’t always agree with the choices other parents make.  But, that’s okay.  We don’t always agree with the shoes they wear or how they live their lives, but we typically butt out and leave them to make those decisions on their own just as we expect them to butt out of our personal affairs.