In his column, Brooks makes a sharp distinction between the "tradable" sector and the public sector. The first is that part of our economy in which businesses slug it out in the intensely competitive market for goods and services traded across national borders. The second is full of services provided in markets with weak competition and sometimes none at all, often by government. The first, he says, is "great at generating output without generating employment. [The second] is great at generating employment without generating output." Just to make sure we get the point, he cites the staggering increase in the cost of education in recent decades with no comparable increase in student achievement, with almost all of that growth cost going into staff (both teachers and school administrators).
His case looks open and shut, but it is not. The top-performing countries in the field of education are producing much better results at much lower cost per student than the United States. Not one of the top ten performers got there by adopting the kinds of strategies used in the "traded" sector of the economy. They are doing it by making government more effective and efficient.
When Brooks sets up his argument, he points to both education and health as examples of his point, both of them cases of government-provided services with out-of-control cost increases and bloated bureaucracies that promote employment at the price of the kind of efficiently produced output that the tradable sector gives us.
But that is not the way I see it. In the health industry, just as in education, other countries are providing much better results overall at significantly lower cost than is the case in the United States. If Brooks were right, we would see high employment and low output in both education and health all over the world, except in those cases in which they were provided by private enterprise.
But that is not what we see at all. In both cases we see much better results in other countries--much better results at much lower costs--and in both of those cases the services in question are being provided by government in a non-tradable environment. If Brooks were right, this could not be the case. But it is. The question is why.
The reasons, in my view, are both political and institutional. The American education system is the only large education system in the industrialized world that still funds its schools based on local property wealth. This has allowed wealthy people and only wealthy people to buy homes in the nation's best-performing school districts. These school districts are able to provide their children with the most important resources that students can have: other students who are highly motivated to study hard in school, high expectations from their teachers and parents and the best school teachers in the country. Ironically, this funding system allows these wealthy people to pay very low property tax rates while at the same time producing the country's highest tax yields. At the other end of the spectrum, those who can afford to pay the least for their housing are sent to school with students for whom their teachers have very low expectations, where the prevailing culture places a low value on education, where the lowest quality and most inexperienced teachers can be found and where the financial resources are most meager. The distribution of education quality among districts in any metro area closely tracks housing prices.
The story is much the same on the health side. We have a multi-tiered structure for health care in the United States. The super-rich live outside the health insurance system. They pay cash for the health services they use and have access to concierge care systems run by the top internists in the country. Each of these concierge medical service providers has a very short list of very high-paying clients, so they are available on a moments notice to each of them for as long as they are needed, and refer their clients, whenever necessary, to the top specialists in the country for whatever ails them. All this care is provided in what amounts to a five-star hotel setting. If they happen to be unfortunate enough to get ill at a distance from the world's best medical facilities, these clients make use of private medivac planes with special medical teams and facilities to get them to the medical facility of choice, anywhere in the world. At the other end of the spectrum are poor people with no health insurance who typically get little or no health care except when in extremis, when it is often too late to be effective. In between we have people who have access to various levels of health insurance, all keyed to the financial resources of the firm they happen to work for.
And so, to an extent unmatched in any other advanced industrialized country, the quality of health and education available to families is a function of the wealth, education and social position of the people seeking those services.
Average education and health outcomes are rotten in the United States compared to the other industrialized countries. Education and health costs are higher in the United States than in the other industrialized countries. This is not because of any dichotomy between the traded sector and the government sector. It has nothing to do with that. What it has to do with is the simple fact that the wealthiest and most powerful people in our society benefit mightily from the way we have structured the funding and provision of health and education services. Our best schools, physicians and hospitals are the best in the world. But access to them is limited to a favored few. The most powerful people in our society have managed to reserve for themselves the finest physicians, the best hospitals, the best teachers, the most favored student bodies and best physical facilities for schools in the United States. They have gotten these excellent schools at bargain basement tax rates. They have cornered the market for the best physicians and hospitals without having to limit their access to doctors and hospitals on anyone's list of providers or suffering from having to pay extra for certain procedures. They will not give these advantages up without an enormous fight.
Brooks ends his piece by praising Rahm Emanuel for holding out for the President's "education reform agenda." But the President's education reform agenda has nothing to do with the education reforms that enabled the top-performing nations to get to the top of the world's education league tables. Those countries got there by putting more, not less, of their money behind hard to educate students than easy to educate students, by doing whatever was necessary to recruit their teachers from the top of their graduating high school classes (rather than the bottom, as we are doing), insisting that their teachers in training really master the subjects they will be teaching and really master the craft of teaching (rather than not caring whether our elementary teachers have ever had a math course in college, as we do, waiving our already abysmally low standards for becoming a teacher in the face or recurrent shortages or celebrating teacher training programs that provide only a few weeks of training for new teachers in their craft).
Like many others, Brooks uncritically accepts the prevailing view of "education reform" as consisting of tough teacher accountability based on standardized tests of basic skills, and taking the caps off charter schools. But there is not a single top-performing country in the world that has gotten to the top of the charts with such "reform" programs. I confess that I find it profoundly depressing that a social critic whose opinions I value as much as Brooks' has apparently not--at least not yet-- asked himself what the evidence is for the prevailing "education reform agenda."
But he is a very bright and perceptive social critic. I am still confident that, if he would only take his eyes off the United States and look at our best competitors, he would realize that the appalling performance of our education system is due not to the fact that it is run by government but to the fact that the design of our education system has produced a politics of education that has made the necessary reforms extremely difficult. We are surrounded by examples of very effective, government-run education systems that seem to be just out of our reach.