Creative Destruction and Schools

June 11, 2010
Posted by Jay Livingston

Charter schools seem to be all the rage. Even the Obama administration likes them. Now New York state is more than doubling their numbers.

Charter schools are a pet project of conservatives, who see them as a way to weaken teachers unions. Mayors, maybe even in liberal places like New York City, may feel the same way. Conservatives also like charters because these schools are, at least in principle, based on competition. Charters are run by private entrepreneurs, not public monopolies. Schools are competing, since they have to compete to attract students. Within a school, the principal can reward good teachers and fire bad ones, so teachers are forced to compete.

In the classic Adam Smith model, when suppliers compete and consumers can choose, products get better and prices come down. As more suppliers enter the marketplace to compete, the strong survive, the weak become the debris of “creative destruction.” But the consumers are better off. That’s certainly true for many products – like the computer that you are reading this on (probably not a Kaypro). But with charter schools, the effect may be reversed. The first ones may be the best. Then, as states make it easier for more educational entrepreneurs to get into the game, schools of lesser quality may come on line.

The overall evidence on charter schools is hardly cause for conservative rejoicing. The well-done studies find that most of them do about as well (or as badly) as public schools at improving kids’ test scores. A few do better; a larger number do worse. More to the point, the charters that do outperform publics are those in states and cities where they face strong resistance (mostly from unions). In places where charters have had an easier time, they tend to do worse than publics. And where there’s money to be made by entrepreneurs, there’s also the risk of outright fraud.

2 comments:

robertrusso said...

I've never heard the perspective that charter schools are conservative. I've fought public schools all my life believing it is hard-hearted conservative academicians that maintain their institution against reform by liberal outsiders. Charter schools are the first step toward agendas like shutting down the school system altogether, something that strikes fear into the heart of conservatives. I always thought being antiacademic made me a liberal.

Jay Livingston said...

Robert, If you use the literal meaning of conservative -- a pefrerence for the status quo, resistance to change -- then charter schools are not conservative. But on the usual US political divide, most supporters of charter schools have been on the right (the Hoover Institution, for example). As for shutting down public schools, I suspect that hearts across the political spectrum would be fearstruck.