Tuesday, April 20, 2010

Private vs. Public Education

A friend has been in my ear about why a fully privatized education system is infeasible at this time. I'm just the third party to her debate with another economist, but I'm going to try to organize some thoughts I've had while listening to the debate.

A fully private education system would suffer, I think, from some dynamic inconsistency. It's easy to argue that parents would take all the tax money they saved to buy their children high-quality education, and in fact that quality could go up as price goes down. But it is also very possible, maybe even likely, that parents with lower incomes would prioritize spending money on things other than their children's education. If the parent has no particular incentive to send their kid to the best possible school, and a healthy skepticism of the education system (perhaps because they didn't receive a good education), it's easy to imagine a cycle taking hold for the poor that is difficult to escape.

Suppose, however, that we assume all parents value education as a good and will seek high quality education they can afford for their children. Where will the higher quality schools locate? Probably in wealthier neighborhoods, because more families there will be able to pay for education. Thus students in low-income neighborhoods may be priced out not by tuition costs, but by their location (i.e. they cannot afford to get to the quality school even though they can afford the tuition). Costs like these are often glossed over when "libertopians" consider their ideal world.

Don't misunderstand this post - I'm all for school vouchers and bringing more accountability to the education system. But I think academics often miss the point that not everyone values education the same way they do, and their proposals for reform implicitly assume education is a normal good for everyone all the time. In addition, reforms need to be considered within institutional structures. Major reforms require larger institutional changes and these challenges need to at least be acknowledged by libertopians.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty