Study their behaviors. Observe their territorial boundaries. Leave their habitat as you found it. Report any signs of intelligence.

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Saturday, February 04, 2006

It's The Incentives, Stupid

Fellow San Carlos K-8 parent Susan Jones writes

It's the Funding, Stupid. Full stop. End of story. There is no bigger issue that the school district needs to address than How-The-Heck-Will-We-Get-Significant-Moolah into the school coffers. I'm talking big money. Millions. We need more money to retain our best teachers.

I don't agree that higher pay for even our worst teachers is in fact the least stupid way to retain our best teachers.

K-12 education in America just needs one reform: put adequate tuition dollars in the hands of parents, and let a thousand K-12 startups blossom. Can you imagine the customer-focused entrepeneurship of a Dot Edu Explosion sparked by de-socializing K-12? Can you imagine if the bottom-percentile tenure-and-pension-seeking unionized civil servant educators had to compete with school startups fighting for market share and staffed by teachers whose stock options depended on parental satisfaction with student achievement? Can you imagine if our best teachers got five-figure annual bonuses, without regard to where they stand in the union tenure pecking order?

The government should of course provide mandatory standards and safety-net assistance for things like education, food, and shelter. But this no more requires government ownership of schools than it requires government ownership of supermarkets or dormitories. You "get what you pay for" only if the people you pay know you have the option of paying someone else.

K-12 education is too important to be a government monopoly, but government schools have 89% market share because 100% of their potential customers have to pay for the product even if they consider it too inferior to actually use. K-12 education is also too important to be a charity, and yet the government monopolization of this industry leaves every school's PTA doing constant fundraising. My children's education is important, but not any more so than their nutrition or their healthcare or their physical safety. Nevertheless, our local supermarket doesn't conduct silent auctions to raise money so that the food there will be safe and nutritious. And our doctor doesn't run bake sales to make sure he has up-to-date medicines and instruments. And our airline doesn't organize car washes to make sure the wings don't fall off when we fly off to visit the grandparents. There is no sound economic argument for the K-12 industry being a government monopoly, and its status as a monopoly in America is simply a historical accident. The post-secondary education industry in America is much closer to a free market, and (surprise!) post-secondary education in America is the best in the world.

In the absence of reforms that put tuition dollars in the hands of parents, any extra funding intended to retain our best teachers should be aimed exclusively at our best teachers through merit pay. Instead of giving more to the school fundraiser du jour, I'll be donating anonymously to the kindergarten teacher(s) that I most want to still be there when my two younger kids enter school.

For a 3-page survey of the economics of education, see the article from the Concise Encyclopedia Of Economics at For a 12-page overview of how to improve K-12 education in America, see the Cato Institute's Policy Handbook chapter at See also the Reason Foundation's 2005 primer on K-12 education in California at For my previous postings on education, see here and here and here. For my candidate statement in the 2001 San Carlos School Board race, see here.

P.S. No discussion of education should fail to note that what parents do with their kids outside the classroom will always be the biggest differentiator in their children's education.

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