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Market Forces Strengthen Public Education

By Paul Hill

K-12 education can't afford to be an institution apart from all others and can't hope to reach its goals without using market forces. That's the message of this week's commentary by Terry Moe and myself.

Neither of us is any kind of market fundamentalist. Terry, whose landmark book Politics, Markets and America's Schools, always insisted that government must set goals and license providers, even in a school voucher system. My own views about the importance of market forces came from seeing how political governance and civil service-style employment had crippled big city public schools, and how little use city school systems made of the intellectual resources present all around them.

The effort to keep public education apart from the marketplace of new ideas and new skills has had serious negative consequences. Public education is the only service industry that has not cured its version of "Baumol's disease" (see my recent article with Marguerite Roza), i.e. constantly growing costs but stagnant output. This is so because, until recently, public education could count on constantly expanding funding, was not subject to competition, and enjoyed a broad consensus about the value of an exclusive career workforce.

Now public education is experiencing structural deficits, internal competition from charter schools, external competition from technology-based learning models, and doubt about the value of making teaching the only professional career that is not open to lateral entrants and does not offer significant rewards for superb performance. These forces are opening up public education to new ideas about how students will learn and how new combinations of teacher work and technology can make schools more productive. They are also creating new definitions of a public school (to include schools that contract out for on-line instruction and teaching services) and of a teacher (to include professionals who work under performance contracts and might be employed by more than one school or district).

These changes are coming, and they could have huge benefits - more adaptability to individual students' needs, more productive roles for teachers and new income opportunities for the most effective, and a better match between public education's income and its costs.

But these results depend on government's shifting its role, from the protector of incumbent schools and employees, to the referee of a constant search for more effective ways to educate children. They will also take time. "The market" doesn't produce a good solution the first time. It allows a constant search for something better, and encourages development of unprecedented ideas and new uses for human talent.


Paul T. Hill is the John and Marguerite Corbally Professor and director of the Center on Reinventing Public Education at the University of Washington-Bothell. His latest book is Learning as We Go: Why School Choice is Worth the Wait (Hoover Institution Press, 2010).

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