Category Archives: Education

The hypocrisy of local control advocates

November 6 there will be a proposed constitutional amendment to the Georgia state constitution (Georgia Charter Schools Amendment 1) on the ballot that would grant the General Assembly the authority to create charter schools directly, thus bypassing creation by the local school board. This activity had been found to be unconstitutional in a May 2011 ruling by the Georgia Supreme Court – hence the amendment to make it constitutional. This amendment is quite the conundrum: voting yes would marginally increase school choice at the expense of creating an entirely new government bureaucracy to oversee “state” charter schools. However voting no would prevent new bureaucracy, but at the expense of continuing to maintain the monopoly privilege of the local school system. A bit like trying to decide if I would prefer to be kicked in the mouth or the stomach.

When the positions of both sides are contrary to the principles of a free society it makes it that much easier to pick apart their rhetoric. The argument from the pro camp is essentially that in order to increase choice we need to just stop pouring money into the current (local) system, and now pour money into an entirely new (state) system. Trust us. We know what we’re doing. They claim it will not divert money from the local schools, and that is true, to an extent, as the amendment makes specific mention of non-diversion of funds. However, it is laced with qualifying language such as “prohibits…deduction of CERTAIN state funds from local school districts”. Funds are fungible, although non-discretionary funding may not be touched, there is no doubt that discretionary funding will magically become scarcer. And when that happens you will have one side shouting “draconian cuts!” and the other “no change in funding!” and both would be correct. Is it any wonder voters are turned off by the political process?

The con side is just as bad. They employ the same anti-competitive rhetoric usually reserved for discussions of vouchers. Charters are evil because the competition they would engender results in (a) wasteful duplication of effort and (b) would siphon money away to evil non-local “for profit” school organizations. So I suppose then it would be an equally good idea if we were to outlaw private groceries and establish a local government run “food board” that monopolistically sells food to citizens in its region in order to eliminate duplication of effort and the export of “local money”. It’s much easier to misdirect the spotlight from one’s own pro-monopoly rhetoric if it is draped in anti-local jingoism. I guess a local monopoly is preferable to “foreign” competition.

The perplexing part is that both sides are right and wrong. Both local control and more choice ARE better, but monopolistic trusts and bureaucratic government programs are not the way to achieve those goals. The truly hypocritical position lies with the local school boards that take great offense at the state intruding into their perceived power domain, however, they have no qualms about intruding into a parent’s right to have ultimate control over their child’s education. A true advocate of local control defends the rights of the most local decision makers: the parents. Parents have the right, not the privilege, of deciding how their children will be educated – without being required to suffer the diminishment of choice via the act of reaching into the parent’s wallet in order to pay for the choice already made for the parents by the school board.

In the end I reluctantly recommend a “no” vote if only to send a message to the legislature that we want better legislation. We do not need more government control of the education market, we need less. We need an option that provides for less outside control and more local control, control by the parents.

The Value Myth

Are teachers underpaid? How much is a teacher worth? To answer this we must first define “value”. Although it is a common myth, there is no such thing as intrinsic value. Gold has no more intrinsic value than a lump of mud. The act of digging a hole has no more intrinsic value than teaching. By “intrinsic” I mean objectively measurable. Value is an entirely subjective human construct (just as “beauty” is.) It cannot be measured like density or boiling point. However, subjectivity does not imply lack of consensus. In broad strokes we rank things quite similarly (i.e. we prefer gold over mud). But at the finer scales our value rankings are different and can shift over time. These differences are in fact a necessary condition for commerce. Generally speaking, one values things they want more highly than things they already have. For example, if I buy your wristwatch for $10 then I value the wristwatch more than the $10. Likewise, you value the $10 more than the wristwatch. The value of the wristwatch is not $10, it is either more than $10 or less than $10 depending on who you ask. If that seems counterintuitive, consider this: would you sell your $10 bill for my $10 bill? No, because you gain nothing in the exchange. Then why sell a wristwatch for $10 if you gain nothing in the exchange? Both parties realize a gain in an exchange due to their different value rankings (within the context of that trade).

Both parties realize a gain in an exchange due to their different value rankings

So how does understanding subjective value relate to determining if teachers are underpaid? In a free (non-coercively influenced) market, every completed trade is “fair” in the sense both parties subjectively gained. In a free market being “underpaid” simply means there was a willing buyer that you failed to find that valued what you sold more than the party you sold it to. Subsidized public schooling is at best a semi-free market. It has actually driven wages higher, not lower, than they would be in a free market. We know this because if teachers were underpaid then private schools would poach the best teachers with elevated pay. In fact the reverse is true. Private school teachers make on average 25% less than public school teachers. And yet some would like to widen the disparity even more. For example at the “Save our Schools” rally in 2011 (see video at 3 min.) a woman implied we should spend $72 trillion/year on education (I guess the public schools indeed failed her in that she lacked the math skills to realize that spending $1 billion/child would come to that sum).

So how do we align the fact that most if not all of us value teaching above say professional football and yet teachers make far less? The cumulative effect of our individual value rankings when filtered through supply and demand across an economy can result in apparent societal ranking of value at odds with the ranking of value of the individuals making up that society. Teachers don’t make less than football players because “society” values them less. They make less because of math. A small number divided by a very small number is bigger than a large number divided by a very large number. (e.g. what each pays in property taxes or tuition far exceeds what one might spend on watching professional sports yet teachers make less because in part they vastly outnumber (about 4,000 to 1) professional football players).

If you really think teachers are underpaid you are certainly free to start a private school and pay them exactly what you feel is appropriate. That’s the advantage of a free market vs government; nobody’s approval is needed for you to immediately take advantage of the mistakes of others in the market

A reply to objections raised against Educational Responsibility

My “Education” editorial prompted a rational and cogent response from David Land in the Morgan County Citizen. This is one of the reasons I began writing this column, to engage those with differing views in polite discourse free of the usual “Left-Right” rhetoric. Thank you David. I would like to respond to the issues raised.

should anything benefiting the individual be subsidized by the state?

First point: Education is a public good because it tends to benefit society; therefore society should subsidize it. Anything that benefits the individual can benefit society (because society is composed of individuals). This begs the question: should anything benefiting the individual be subsidized by the state? For example, automobiles permit a broader range of employment options and access to goods, so one could argue businesses should subsidize (through taxes) automobile purchases, as that would ultimately benefit those businesses that will have access to more employees and customers. But we don’t do that. Why? Because the free market responded to the demand for this valuable good, thus transforming the car from a luxury available exclusively to the wealthy into a luxury available to every sector of society.  The point is that while a K-12 education is now extremely costly (+$100,000) this would not be the case had there been a free market in education all along, the cost would be closer to an affordable $30,000 over 13 years and thus the argument over “who should pay for it” would vanish. Companies need educated workers, but workers need an education to get jobs. It’s a two way street in which two parties engage in a mutually beneficial exchange (labor <–> money) and there is no a priori reason to assert that party A must provide resources to party B in order that party B may meet the requirements of said exchange and thereby benefit both parties. If you want to buy my house should I be forced to lend you money because said purchase ultimately benefits me?

If shifting costs from an employee to their employer tends to drive wages down, why is it hard to accept that shifting costs from an employer back to the employee would not drive wages up?

Second point: In a free market business owners would never pass on the tax savings derived from elimination of subsidized public education. I do understand the basis for this objection: normally if a business has a good year or receives a tax cut there is no incentive to simply divide the surplus among all employees. However the situation I was describing is unique because it is a specific trade of funds, namely, the tax being cut is used for a known (earmarked as it were) cost of living for the majority of employees. So the incentives are different from that of a “normal” tax cut. If we understand the incentives then we can understand why most would raise wages and/or lower prices. Let us suppose we could wave a magic wand and eliminate all property tax and most state income tax overnight. Employees would now find themselves in the position of having to pay for their children’s education directly. Those formerly subsidized employees would jointly demand higher wages to approximate their net increase in costs. The incentive to comply for the employer is two fold: 1) maintenance of employee morale through a raise that employers can easily afford (for example, Seachem could easily afford this as we pay over $60k/year into the school system) and 2) lack of rehiring options if a trained employee quits over wages…most potential replacements would be demanding the same higher wage. But let us assume for the sake of argument that no employers would give raises. What would be the result? Because most (99%+) employees with children would value their children more than anything else in their lives they would pay for their education first, thus decreasing their demand for discretionary goods and services. The decline in that demand would result in lowered revenue for those businesses, who would then in turn lower their prices (which they could afford to do out of the tax savings) in an attempt to attract back customers…this would thus make goods and services more affordable for everyone. Even if nominal wages ($) are static, real wages (purchasing power) increase as prices decline (price deflation). Because education costs could drop by as much as 2/3rds the overall effect is a net gain to the aggregate productive capacity of the economy. If you’re still skeptical, ask yourself this: Imagine the reverse, imagine that the government instituted a new “food tax” that supported a program that provided all food for all citizens, would we not expect wages to decline over time (e.g. if you spend $12,000/year less on food it makes it easier to accept a lower wage)? So if shifting costs from an employee to their employer tends to drive wages down, why is it hard to accept that shifting costs from an employer back to the employee would not drive wages up?

Wouldn’t we expect automobile ownership (that is, any luxury item) to be lower in Haiti?

Third point: Haiti as a real world example where a mostly private education system has failed. This is an interesting example, however it is an apples to oranges comparison that only underscores the expected market penetration of a luxury item in an impoverished country.  Education, while desirable and beneficial, is not essential to life and so it is economically classified as a luxury good. So are automobiles. If we were comparing automobile ownership between the US and Haiti wouldn’t we expect automobile ownership (that is, any luxury item) to be lower in Haiti? In fact they are: 12 vs. 808 per 1000 people. So if one luxury good has a low market penetration in a poor country wouldn’t we expect all other luxury goods to as well, including education? Using an impoverished country such as Haiti as an example of how the free market cannot provide education to all citizens is as fallacious as arguing that the private market in Haiti has been a failure in making automobiles available to all citizens and thus the only answer is a publicly subsidized automobile ownership program.

Fourth point: Children of the poor would suffer due to lack of educational opportunity. Poor children would not experience a lack of educational opportunities as schools would offer needs based scholarships (as private schools do today) and charitable organizations focused on education would quickly sprout up (funded by those who honorably believe it is their obligation). But let us assume again a worst-case scenario and that those in poverty could not go to school. Will they just lay down in the street and die? Of course not. If there is a demand, the market will respond. Perhaps home schooling co-ops might form. Perhaps businesses would charter trade-focused schools. One example of how the market can quickly and effectively provide a superior education to those in the low income spectrum was the destruction of the public school system in New Orleans by Hurricane Katrina. Charter schools were quickly legalized and the market responded with schools that have by every measure outperformed the old system (see video at 30:00 mark). The point is that the creative brain power of millions of people will find solutions to even the most challenging issues.

I could just as easily argue that public education was the cause of those countries’ poor GDP as I could argue that private education was the cause in Haiti.

Fifth point: Education drives productivity and since private education would result in fewer people being educated this would result in lowered US productivity. Again, private education would not result in fewer people being educated, but even if we assume for the sake of argument it is true it would not change the productivity of the US. Enhanced educational opportunities are not what drove the tremendous growth in the US, but rather are a result of it. It’s like saying “look at that wealthy guy with the fancy car… if I buy a fancy car then I can become wealthy too!” If we accept this assertion then we would expect in every country where there is public education we would find a GDP comparable to the US. But that is not what we see. There are numerous countries that have public education and a GDP near that of Haiti’s . Why would education be a determinant in GDP outcome in Haiti but not in these other countries? I could just as easily argue that public education was the cause of those countries’ poor GDP as I could argue that private education was the cause in Haiti. In point of fact, Cuba ranks above the US in the United Nations Education Index, so that alone should dispel any notion of education driving economic prosperity.

Sixth point: Uneducated masses being unable to secure jobs would turn to crime. The correlation between crime and education is real, but the assumed causal relationship is backwards: lack of education doesn’t make criminals, rather most of those with criminal proclivities are afflicted with a pre-existing condition: contempt for education (by either themselves, their families or culturally). Every criminal in our jails went through our public school system. Clearly a lack of educational opportunity played no roll in their current status.

If we had a non-monopolized private system of K-12 education then education would be one of those “luxuries” that all could enjoy, just as things that were once considered luxuries only for the wealthy are now commonplace (e.g. cars, cell-phones, ball point pens, air travel, air conditioning, etc). That’s what a free market does over time, it becomes more efficient at producing those goods and services in high demand until they become affordable for all. Affordability eliminates subsidization.

Education is your responsibility, not society’s

On the front page of the April 19, 2012 issue of the Morgan County Citizen there were two(1,2) apparently unrelated articles juxtaposed. They actually were as deeply related to each other as the eternal ying and yang of taxing and spending. The first pertained to a $4.8 million projected shortfall in the FY2012 budget for the Morgan County School System (MCSS). The second concerned a proposal to exempt seniors from paying ad valorem property taxes that fund the school system. The rationale for the exemption is that seniors have no children in the school system so why should they bear that cost burden. Why indeed? According to Madison city councilman Michael Naples, “the education of the local youth was the community’s responsibility” and that such support “has been a long standing practice in this country.” Hmmm… perhaps this “community responsibility” is part of this so-called “social contract” I keep hearing about but have yet to actually see anywhere?

Perhaps this “community responsibility” is part of this so-called “social contract” I keep hearing about but have yet to actually see anywhere?

“Community responsibility” is an oxymoronic notion predicated on the notion that we are born into this world burdened by an obligation to support our fellow man under threat of violence and/or loss of liberty to ourselves if we refuse that obligation. Communities or groups do not have rights or responsibilities; only individuals do. Furthermore, to justify this practice based on the longevity of its existence is tautological! That’s the same argument that was used to justify maintaining slavery: “well, we can’t do away with slavery sir, it’s a long standing tradition in these parts!”

Seniors should be exempted from paying for the education of the youth. As should businesses. As should the childless. Other people’s children are not my responsibility. My children are my responsibility. But, this begs the question. What of those that can’t afford to educate their children? Cost would not be an issue were schools not run as government mandated monopolies. Like healthcare, which has also been subsidized and manipulated by government mandates, the reasons for increased education costs are too numerous to delve into here, however one of the principle reasons is the notion that a smaller student:teacher ratio is the solution to the declining educational standing of the US. When I was in the public school system in the 70’s and 80s class sizes were always right at 30 students to 1 teacher… and yet somehow I and the rest of my generation all managed to somehow get an education and become productive citizens. Using the MCSS as an example (see this document and MCMS website), I determined the approximate student:teacher ratio is anywhere from 18:1 to 10:1 (depending on whether or not you count educational support staff). If the county were to simply move that ratio back to 30:1 (i.e. terminate 2/3 of the teaching staff), the county would save approximately $14 million/year. Since 1970 we have more than tripled (see this link and this link ) the cost of education per student in this country with absolutely no change in test results, so clearly the 10:1 ratio is not paying off.

Education does not need to be subsidized by the state any more than day care does. Using simple calculations based on raw labor value inputs, I compute that monthly education costs per student (including administrative support and capital costs) should be around $200/month (using an annual teacher salary of $67k/year and 30 students per teacher + overhead). If you subtract what most are already paying in property taxes and state income taxes this would basically be a wash or net gain for most. Absent property and income taxes imposed on businesses the “poor” could demand higher wages and lower rents. One of the primary reasons private schools currently cater to the wealthy is that only they can afford to subsidize the education of multiple other children AND their own. If all were released from this subsidization requirement you would see a range of new private schools at different price points (just as we see a range of car options from Kia to BMW).  Doing the same thing over and over and expecting a different result is the definition of insanity. Let’s try something else, because clearly the last 40 years of government monopolized school systems have yielded no improvements.