America Can Rescue Public Schools by Encouraging Competition for Students

A growing number of school reformers have something in common with such world leaders as Mikhail S. Gorbachev, Deng Xiaoping and Margaret Thatcher: Their answer for failed public enterprise is to stop throwing more money at it, and introduce competitive market forces. In public as well as private sectors, there is no substitute for a market to distribute goods and services efficiently.

Just as the Soviet Union, China and Britain are applying principles of free enterprise to state-owned concerns, more and more educators--not to mention parents and students--think America’s public schools could use a dose of the same medicine.

The issue is straightforward: Today’s schools are admirably suited to the past; they will not prepare us for our high-tech future. For more than 150 years American schools have been monopolies; student assignment is based on geography. That’s what “neighborhood” schools are all about.

If you live in a “good” neighborhood you may have “good” schools. If you live in a bad neighborhood you’re almost certain to have bad schools. If you’re black or Latino and poor, odds are that your school is third-rate. Improving the schools, however, is not a matter of altruism or philanthropy; it is a survival issue.

The economy of the future--not to mention modern democracy--cannot tolerate “bad” schools for poor children. We can’t compete in a global economy without a world-class work force; that means world-class schools--for everyone.

In addition to being monopolies, our public schools are organized like factories with a hierarchical, command-control management style that would be the envy of most Soviet commissars. In all but our most antiquated firms, this practice has disappeared. Certainly, no high-tech firm could long endure if it were run like a typical school; top-down management is now a thoroughly discredited practice.

Finally, our schools are organized around the agrarian calendar of the late 19th Century. In important respects U.S. public schools are about as exciting and productive as a Soviet collective farm. Teachers have few incentives to produce; that so many teachers do is a tribute to their perseverance, because the system is not designed to encourage or reinforce them.

The public at large is in a fix as well; if school problems surface, people can complain to the school board or vote down the next tax increase, but that’s the practical limit to their power.

Think what it would mean, however, if schools systems were restructured using a “public sector market.” Instead of neighborhood assignment, imagine a public system allowing a family to select a school based on its academic and extracurricular offerings; imagine a school system where teachers selected the school in which they would teach as well.

Put simply, would you rather choose a school or rely on bureaucratic assignment? The most recent Gallup poll on education indicates that an overwhelming majority of Americans--71%--think that families should be able to choose their public schools.

Choice systems are in place or on the drawing boards across the country. Minnesota, for example, recently enacted legislation to permit statewide open enrollment. And school districts as diverse as Los Angeles, San Diego, Prince Georges County, Md., New York City’s District Four (Spanish Harlem), Cambridge, Mass., Rochester, N.Y. and Miami have successfully implemented “magnet” school programs.

Magnet schools introduce market mechanisms to the public sector. They are schools organized around an academic or vocational theme--music and art, math and science, the humanities, for example--and they attract (or fail to attract) students based on the school’s “character.” In most respects they look like private schools, but they are in the public sector.

Instead of “supply side” education, in which the system is run for the convenience of dispensing bureaucrats, a public-sector market enshrines the concept of consumer sovereignty. But if a school has to “earn its way” in the same way a business does, it must be free to organize itself as it sees fit. That means freedom to spend its “income,” to hire and even fire teachers and other staff, to design a curriculum that will attract and hold students and generally to behave in an autonomous and independent manner.

This also means freedom from excessive regulatory control at the state level; the state should set broad policy goals, require performance standards and leave schools to their own devices in meeting them.

That’s exactly what the best companies do, because it works: hire smart people, set goals, establish incentives, measure performance, reward success.

Restructuring of this kind--requiring public schools to compete with one another--will transform public education. Three powerfully important consequences will follow: Teachers will become, for the first time, professionals; students, across the board, will learn more and learn better, and successful racial integration will become a reality.

If you doubt it, look at higher education. A “market” is already well established among U.S. colleges and universities and they are the envy of the world.

They are independent, vigorous institutions that produce or fold. Competitive pressure holds them to high standards and they meet them. UC Berkeley competes with UCLA as well as with Stanford and Pomona. College and university professors are universally recognized as professionals, because they have the autonomy--and the responsibility--to exercise professional judgment.

Perhaps most important, our colleges and universities are among our most successfully integrated institutions. Granted, there are still isolated examples of racial tension, but if America is to become the first successful multiracial society since the time of Alexander--as we must--school is where to begin.

Naysayers will argue that elementary and secondary schools are different, that the same standards shouldn’t apply. Colleges and universities are voluntary, they point out. They’re right. So should elementary and secondary school be voluntary. Compulsory attendance as a general requirement may be all right, but not as a specific requirement of a particular building.

Another important reason for public-sector markets today is the budget blues affecting California state and local government--not to mention Uncle Sam. More than ever, we need to increase the efficiency of government and public confidence in it. The two go hand in hand. Competition in public-sector markets would increase efficiency, permitting higher levels of service for the same outlay. And most important, the ultimate constituent, the taxpayer, will be willing to pay more if the system produces more.

One charge leveled against magnet schools is that they are elitist, skimming the best and brightest. “Controlled choice” is an approach favored by reformers and the courts alike to keep magnet schools integrated. Numerical targets or quotas can assure racial or academic balance. Indeed, the remedy handed down last year in Kansas City (home of Brown vs. Board of Education, the landmark suit that in 1954 found segregated schools unconstitutional) is magnet schools.

The court’s reasoning is supported by recent findings from affluent Montgomery County, Md. There, a three-year study of magnet schools reports higher test scores and increased racial integration both in and out of school; in magnet schools, a child of one race is more likely to have a friend of another race.

Perhaps most important, teachers in the Montgomery County magnet schools have the same expectations for all children in their programs; they don’t expect kids of one race to be smarter than others. They expect them all to do well. And they do.