Note to Mike Goldstein


Why isn’t this guy, James E. Miller, and not David Rubenstein, correct (see below)? Or at least why do I think he’s correct? Why is the service that teachers offer somehow different from any other business? You of all people ought to know? Anyway, his reasoning is, and has for a long time been, sticking in my craw. (Meaning I don’t seem to be able to move on.) Although “decline” may not be the right word to use because when were things ever better? Here also there was no Golden Age.

‘Rubenstein mentions the need to “Educate. Educate. Educate.” by reforming public school systems and highlighting the need for governments to “allocate resources more efficiently.” But of course public officials who derive their income from coercion are never capable of economizing resources as prudently as private individuals. If Rubenstein truly wanted the education industry to thrive, he would demand the government relinquish its claim on the sector and allow the market mechanism to bear its fruits. Teachers offer a service like any other business. Having bureaucrats in charge of a great portion of the industry is no better than nationalizing the production of sweaters or miniskirts. Economic calculation and resource allocation are best utilized by those who earn their income from voluntary consumers. The consequence of the public education system, reliant on force for payment, has been an increase in cost for service and no real increase in the quality offered. In other words, the industry’s lack of the elements that define capitalism has been responsible for its decline.”


One thought on “Note to Mike Goldstein”

  1. Dear Philip,

    It’s a good question.

    The pre-school market is a fairly capitalistic one.
    I send my kid to a pre-school down the street, 3 mornings a week. I think it costs $40/morning.
    We also have a nanny ($18/hr) and lots of help from Grandma and the uncles. There’s a ritzier pre-school a couple blocks up, costs 50% more. And Bright Horizons, a fairly sizable corporate daycare, not too far away.

    I’m glad we’re consumers with choices. With that said, I am sort of surprised that the market has not generated very good choices in my area.

    I agree with your point about “decline.” What Golden Age does he reference?

    The larger point is that various efforts at markets and choice haven’t yet panned out great in American K-12. Generally better than status quo, for sure, but often so so so modestly better at least measured by test scores, with a few exceptions (like Boston and NYC charter schools). Adam Smith might say “That’s because you only add in SOME market features, but not all of them.” He might be right.

    For example, a key limitation of our charter school is that — since we can’t raise our price — we can’t invest. That is, we can’t say to the Taxpayers of Massachusetts, if you’ll pay me an extra $1,000 per year per student, I will deliver to you a 20% better product as measured by such and such. If that were possible, I would probably make a one-time investment at upgrading our English curriculum, with the notion of recouping the investment over 3 or 4 years by raising price.


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