August 25, 2015

The economic underpinnings of school choice

By Wen Fa Attorney

Two seemingly unrelated phenomena in education often befuddle those interested in the topic. First, substandard public schools continue to fail no matter how much money the government throws their way. Second, teachers’ unions across the country categorically oppose school choice programs of all shapes and sizes. The same economic principle explains both events.

Suppose that Congress passes a law requiring everyone in America to carry a national identity card. Congress delegates the sole power to make, price, and deliver the cards to a single organization (call them the Kingmakers). Would you expect the Kingmakers to sell the card to you on the cheap? Probably not. Deliver it to you within a reasonable time? Unlikely.

The Kingmakers’ monopoly over the National ID cards explains its exorbitant pricing and tardy delivery. True monopolies exist not by offering better goods or lower prices, but by enticing the government to stop others from competing. Since the Kingmakers have tempted Congress to give it the sole power to produce, price, and deliver the National ID, it knows that no other organization will bite into its market share no matter how high the price or how shoddy the product.

Public education is the same story with a twist. Here, state legislatures are actually the ones enacting the school choice programs, so teachers’ unions (after spending over $100 million trying to lobby the legislature) have turned to the judicial branch to preserve its monopoly power in education. Such power allows the unions and their members to live comfortably regardless of performance. The corresponding lack of incentives is why education might just be the only field in which productivity is lower now than it was two generations ago.

Economic principles explain why teachers’ unions use every kind of argument to oppose every kind of school choice program: A constitutional challenge to a scholarship tax program enacted to help poor children in North Carolina, and a lawsuit arguing that Pennsylvania statutes prevented charter schools from competing on a level playing field with traditional public schools. In the realm of education, both charter schools and private schools represent an increase in quantity. But monopolists thrive by keeping quantity low so that they can keep prices high. Professional associations, for example, use occupational licensing to keep outsiders out.

None of this is to attribute any moral failing to teachers’ unions. They have a duty to promote the interests of their members. But just as teachers’ unions are committed to looking after the well-being of public school teachers, PLF is committed to defending the rights of parents and children to go to the school of their choice and receive a better education. That’s why we have defended school choice programs in North Carolina and Pennsylvania, and why we will continue to defend school choice across the country.

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