Viewpoint: The education competition myth

Incentives to Win–But let’s assume we can somehow define “winning” (and despite my criticism of it, let’s imagine that test scores can indeed define it).  The act of winning must deliver some benefit to the winner, because without which, the pressure of competition wouldn’t have any effect as there would be no reward for behavioral change.  In the private sector, this usually means financial gain for the company, for its shareholders, and even for its employees.  As Apple Inc. developed winning products, its stock price rose to make it the most valuable company in the world, and of course that enriched its shareholders and its employees (and in particular, its management).  Naturally, there can be non-financial rewards as well from winning–career advancement, fame, etc.  These personal rewards–whether they be financial or otherwise–are essential to driving behavioral change and creating a direct effect on how employees conduct their day to day business.

In public schools, it is rare that such benefits exist to any significant degree.  Certainly there could be “bragging rights” for being in a high-performing school, but I would suggest that pales in comparison to the incentives that exist in the private sector.  Of course, the natural question then is, “Why don’t we change the compensation system to create these benefits?”  I agree that the traditional compensation system in public schools needs to be reformed, and I would certainly like to see compensation more aligned with merit and performance (how we measure that is the subject of a whole other article) as opposed to tenure and the more traditional methods, but as a school isn’t inherently a profit-maximizing business, such incentives will always be limited relative to private sector counterparts.

Minimal Downside of Having Losers–If competition breeds “winners,” it assumes it’s acceptable to have “losers.”  If one retailer goes out of business, I’ll buy from another.  In schools, even if we knew with certainty that a school was underperforming (despite the problems with measurement and the time horizon mentioned above), do we want the school to lose?  Losing often takes years, and we may find out years later that, although we put competitive pressure on the schools and eventually migrated most students to a better school, we sacrificed those kids who didn’t (or couldn’t) defect to the “better” school.  It’s a pain if I spend some money on a product that didn’t work and then the company goes bankrupt, but it’s a tragedy to fail certain kids waiting on the pressure of the free market to work its magic.  Kids only go through school once–we rarely get a “mulligan.”  For me, a better question is: “How can we create an environment that allows all schools to be winners?”

Having a Level Playing Field–As discussed in “Viewpoint: Why Education is Not Like Business”, one of the fallacies of comparing business to public schools is that the former can pick its customers, whereas public institutions need to serve everyone.  Inherent in the notion of competition is that you’re competing for someone–a certain sub-set of the population.  If schools could freely compete like businesses (let’s say in a purely voucher system), there would be a big segment that no one would fight for.  Those kids and their families would be left unserved or underserved.

But there is a better analogy in the private sector–natural monopolies.  Natural monopolies are companies like utilities where the cost of creating competition is actually higher than the value of such competition (imagine five companies running electric power to your house–the massive inefficiency would dwarf the value of competitive pressure).  That is why certain companies like utilities are allowed to keep their monopoly status but are regulated instead.

In markets where natural monopolies exist but “alternate” providers were allowed to compete, amazing unintended consequences emerged.  When AT&T was broken up in 1984, the resulting seven “Baby Bells” were each required to provide service to every household in the country (“universal service”), while at the same time the market was deregulated to allow other providers to compete while not being subject to the same restrictions.  The Baby Bells had to effectively “cross-subsidize” the costlier (often rural) customers from the more lucrative business customers, while the new firms didn’t need to.  Guess what happened?  New start-up telephone companies grabbed the lucrative business market, offering a better value as they weren’t forced to cross-subsidize.  This wasn’t competition on a level playing field.  Sound familiar?  In many ways, this is exactly what private schools and charter schools do in relation to the overall public school system.  They don’t create competitive pressure—rather, many schools just cherry pick and create a larger burden on the public entity, which is required to serve all children, many of whom require substantially more resources.

Many may view this article as one bashing charter schools.  To be clear, it is not.  Many school districts (including ours) have high functioning charter schools, and I value them for the potential “laboratory” they create to test out new teaching and learning materials, technologies, methodologies, and personnel management strategies.  However, we should not be under the illusion that charter schools create competition.  Certainly one can point to examples where the existence of a charter or private school made the community put pressure on the public schools to improve, but due to all of the fundamental lack of conditions to fulfill what is otherwise the beauty of competition, such examples will always be the exception rather than the rule.  But then, it begs the question, if the primary value of charter schools is flexibility and value of experimentation, why don’t we just give most public schools that same ability?

Also, nothing above should suggest that pressure to improve doesn’t –or shouldn’t–exist in public schools.  It absolutely must to motivate school boards, superintendents, administrators, principals, and teachers to do the best job they possibly can.  Many studies show that the difference in teaching quality is greater among the teachers within a single school than the difference in average across schools.  So then, how can we build a system to better reward excellent teaching and to create the appropriate peer pressure on the entire team to be at peak performance?

And just because we can’t define “winning” very well doesn’t mean that we don’t hold teachers, principals, and school districts accountable.  But this is the fundamental role of our local political system.  Each community needs easily accessible and useful information with multiple measures of success, and community members must stay involved and hold its schools accountable though their elected representatives.  So, instead of pitting every school against one another, let’s give schools the resources–and then hold them accountable–to ensure that they are doing the best they can to help all of their students reach their potential and provide the “public good” benefit to all of us from a well-educated citizenry.

Seth Rosenblatt is a school board member in San Carlos, Calif., and he also serves on the board of the San Mateo County School Boards Association. For his day job, he is a strategy and marketing consultant for technology companies.

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