More competition needed in education
May 16th, 2011
08:45 AM ET

More competition needed in education

Editor's Note: Raghuram Rajan and Brian Barry teach at the University of Chicago’s Booth School of Business, where Barry is Executive Director of the Initiative on Global Markets. You can read more from them at Project Syndicate.

By Raghuram Rajan and Brian Barry

President Barack Obama, like many Western leaders nowadays, made improving education one of his main promises to voters during his election campaign. But other domestic issues - health-care reform, budget battles, and high unemployment - have understandably loomed larger. And the United States is not alone: education reform is being held up in the United Kingdom and continental Europe as well.

Improving education remains one of the clearest ways that governments can make a lasting positive economic impact. A well-functioning education system is the most effective way to help equip people with the knowledge and skills they need to boost incomes and compete in a globalized economy. The key to such a system is embracing the role that competition can play in delivering better education to students.

That means, of course, considering the role of teacher unions as well – an issue that elicits very different reactions from the left and the right. On the left, many worry that President Obama, UK Prime Minister David Cameron, Swedish Prime Minister Fredrik Reinfeldt, and other leaders are already focusing too much on increasing accountability: they view any reforms that treat teachers as part of the problem with suspicion. On the right, it often seems the opposite: any policy – such as vouchers – must be good if teachers oppose it.

Common ground can be hard to find in such debates if both sides disagree fiercely over basic principles. But competition is one principle that ought to command broad political support, because of the benefits that it tends to deliver for ordinary people. Many on the left nowadays seem especially confused about the advantages of competition, and many progressives’ approach to education is an excellent example of this.

In the United States, for example, the left today looks back fondly on Franklin Roosevelt’s New Deal – and the big government that it ushered in during the Great Depression and beyond. But the left should also heed events earlier in the twentieth century, during the Progressive Era, when “trust busting” was all the rage.

One reason big business was considered a threat at that time was its monopoly power over assets that were crucial to many ordinary Americans. Farmers did not want to pay steep rates to transport their crops to market, and resented the railroads’ market power. Likewise, workers wanted employers to compete for their services by offering higher wages and better conditions. They fought back against large business combines that threatened to monopolize access to physical capital: the plants, machines, and equipment that workers needed to be more productive.

Politics mattered as much as policy: when their pricing leverage was combined with political clout, the power of big business seemed even more threatening. The fear that big businesses were harming the general welfare by stifling competition – and were politically powerful enough to entrench their monopoly power – allowed reformists from the left and right to find some common ground.

Modern progressives, surveying the economic and political landscape of the past few years, see the potential for another assault on big business, marrying populist outrage with the political muscle of the organized left, such as labor unions. But, while their antipathy to big business appears to honor their intellectual roots, progressives have lost the plot when it comes to competition.

Unlike a century ago, when access to physical capital was the most obvious way to boost a worker’s productivity and income, ordinary workers’ most important asset nowadays is education. Yet, instead of urging schools and teachers to compete with each other on behalf of students (tomorrow’s workers), many insist on defending teachers’ monopoly over access to education – that is, access to investments in income-boosting human capital. Just as with the early industrialists, moreover, teacher unions in many countries have enough political clout to resist reforms that erode their monopoly power.

Some unions are coming to understand the need for change, or at least concession. In Illinois, the teacher unions recently backed a bill that included rules making it harder to strike and easier to get rid of underperforming teachers. But the Chicago Teachers Union subsequently withdrew its support.

Of course, merely loosening unions’ grip on policy, and finding ways for teachers and schools to compete over who can provide the best education, will not deliver the knowledge and skills that modern workers need. Reformers will also need to keep experimenting to find the right way to measure standards – to make sure that teachers are competing on the correct dimensions – and to provide the many other kinds of organizational innovations and support that schools, teachers, and students need.

More competition, however, clearly seems to be part of the way forward. By accepting this, progressives could forge a consensus with centrists and help to deliver better results for a core constituency: ordinary workers. It is time for them to recognize that a powerful monopoly holding those workers back is the one they have been mistakenly fighting to defend.

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Topics: Economy • Education • Global • United Kingdom • United States

soundoff (15 Responses)
  1. j. von hettlingen

    No doubt schools and teachers have an important task to perform, to educate the "workers of to-morrow". This alone doesn't help, if parents don't take part in educating their children.

    May 16, 2011 at 12:52 pm | Reply
  2. dwees

    Is it possible that we should stop thinking of schools as the places where we educate the "workers" of Tomorrow and think of them as places where we educate the people who will solve the current problems our world is facing? We need less cogs in the machine and more problem solvers. How does your analysis hold up to that goal for education?

    May 16, 2011 at 8:33 pm | Reply
  3. Mr. Vogel

    Well written... though I fail to see anywhere in your article where you apply competition to education. In addition... as an educator and a small business owner I live in both worlds, and, trust me... if my supplier is not up to par, I source from another company. Therefore... in my education world, to be competitive, should I be able to fire my source of raw material?

    May 16, 2011 at 11:33 pm | Reply
  4. T

    sounds like a plan- "education" provided by the lowest bidder. let me know how that works out for your kids.

    May 17, 2011 at 5:37 am | Reply
  5. bfuruta

    Here is a program that is working to improve education. Watch a short video on Diplomas Now at http://diplomasnow.org/about-2/dipnowvideo/ . It works because it is resource intensive: support the teachers, support the students in school, support the families outside of school. That is what is needed.

    And the way they support teachers is exactly what we need: COLLABORATION, NOT COMPETITION. In the expert literature, it is called deliberate practice—multiple rounds of practice with feedback, discussion, reflection. Here is another example http://schoolreforminitiative.org/ :

    SRI members are committed to making their practice public to one another, to being reflective, and to holding each other accountable for meeting the needs and interests of all students. Through critical friendship, educators share resources and ideas, support each other in implementing new practices, and build relationships among colleagues characterized by mutual trust and freedom from judgment, while keeping a keen focus on issues of equity. They most often work in on-going, collaborative groups where they freely discuss each other’s practice with the intention of improving student learning.

    In the book The Teaching Gap, Stigler and Hiebert recommend our teachers use a method the Japanese developed called Lesson Study. It is another collaborative form of deliberate practice.

    We could also start earlier. There is no question that preschool programs are more effective than intervention at high school or middle school. You should talk to your colleague at the University of Chicago, James Heckman, who has done work in this area. See http://www.voxeu.org/index.php?q=node/6247 as just one of many studies. We could start even earlier, before preschool. http://hawaii.gov/health/family-child-health/mchb/programs/hs.html

    So to improve education the two things we need the most are 1) to improve teacher effectiveness, by collaborative deliberate practice, not competition; and 2) to be sure that students are ready to learn, with early intervention, primarily in high poverty areas.

    May 17, 2011 at 5:38 am | Reply
  6. Nancy Willard

    This opinion provides excellent insight into why people with expertise in business should stay out of issues that they clearly do not understand. Competition only results in some schools being cast as "good schools" and others as "bad schools." Unfortunately, the so-called "bad schools" are often located in regions where there are many external cultural factors that are also causing major concerns.

    THE major problem in schools in the US today is the incredible financial inequity and the fact that way too many children are living in poverty. So the underlying causes of many of the problems are outside the control of the education community. If these writers want to address these issues, please do so. How can we help kids whose parents see nothing but financial insecurity and for whom there is likely no chance at a financially secure future succeed?

    The prior writer is totally right on. COLLABORATION – where EVERYONE WINS – is the approach we need to be taking to education.

    May 17, 2011 at 9:56 am | Reply
  7. Francisco Alves

    Education is not business and must not be seen as such. In education we are dealing with people that cannot be fir neatly on a shelf and taken inventory of once a year.
    In trying to make education for business-like, all we have to do is look at the number of well-run businesses that fail every year to see where this philosophy will lead us to in the future.
    To "reform" education, our society needs to look at all the pieces, not just the teacher and the classroom. Our society needs to look at poverty, hungry children, an ever-expanding immigrant population, and then make necessary reforms. And when these changes are made, it is necessary to invite all stake-holders, not just business professors, CEO's of companies, educational consultants (who benefit from needed "reforms").

    May 17, 2011 at 11:21 am | Reply
  8. james2

    I was in support of the protestors in Wisconsin when Governor Walker tried to take away their collective bargaining rights because that was clearly a game of political doublethink. The main point of contention with teacher's union seems to be a deep distrust of school principals and administrative staff. I have always wondered, wouldn't it seem rather silly for a principal to sacrifice the performance of his school just to get rid of one teacher? I mean, do ALL principals just have a penchant to go out of their way to fire teachers that say one word out of line regardless of how good they are? I understand that teacher unions help to fight for fair wages and unfair dismissal of teachers. So then how does the idea of "bumping" or LIFO (last in first out) help this cause or the credibility of teacher unions? I think the Chicago Teachers Union is on the wrong side by pulling their support for SB 7. If you allow only voting members to strike, then it gives unions the ability to bully their members into striking. I think everybody should have a say, not just a select group of people. Doesn't that seem fair?

    http://roth.ilhousegop.org/2011/05/house-passes-landmark-education-reforms/

    May 17, 2011 at 4:30 pm | Reply
  9. Mom

    As soon as children are widgets free market capitalism and competition will educate them. Business principles don't apply to large classrooms filled with varied learning styles and needs. I suggest to you that this notion would be about as successful as our current economy. If we really want to fix education we need to shrink classroom sizes, hold families accountable and support teachers as the intelligent, hardworking individuals that they are. Pay your taxes, get involved and stop publishing this malarkey!

    May 17, 2011 at 10:08 pm | Reply
  10. Jon

    The authors make a well-argued point. But they ignore important history and current news.

    Back in the days when US schools actually produced literate graduates, there was no more competition than there is today. So do we need more competition or simply a return to decent standards? As for the bad teachers. We all had bad teachers, and we all had good teachers, and plenty of parents ignored their children or were not able to participate in their children's education generations ago too. And yet we produced some great generations.

    The countries which are at the top of world school achievement tables are countries where there is no more competition in education than this country, in some cases, even less. Japan, Korea, Finland, Denmark, Singapore, and other nations like the Czech Republic, Israel, and the Netherlands have virtually no private schools at all.

    Let's spare the social engineering. School is about teaching and studying, not football, basketball, glee club, school prayer, pseudo-ethnic academies or any of the things the US seems to lose it's focus on.

    May 18, 2011 at 1:36 am | Reply
  11. C. Cantu

    Everyone complains about public schools and their mediocre and expensive performance. I wonder if combining American ingenuity and entrepreneurship, this could change. I propose to create small "Charter Schools" by co-operatives of experienced and certified teachers who by joining forces and focusing on target students could deliver the expected quality education.
    Many new Charter Schools are now generated out of empty buildings, remodeled without fancy architecture, sports facitities, labs and technological devices and often by people who don't have the experience as educators but rather as entrepreneurs.
    A teacher' co-op where all educators share the same responsibilities, earn about the same reasonable salaries, without the tons of paperwork, state mandated programs, requirements and layers of administrators (who carry out inquisitorial supervision but no educational support) could be the solution.
    Many public schools have more than double the number of support personnel than they have basic core subjects teachers. Many ancillary and administrative positions earn more than 3 or 4 times the salary of an average teacher –without justificatory evidence and with no direct instructional responsibilities– and then blame teachers for student' low scores without providing solutions, support, assistance, or accepting their own responsibility. Many frustrated teachers, blocked in their ability to teach, become administrators, running very espensive programs without verifiable and long term accountability. Sports alone can take away 30% of a school budget.
    Making co-ops viable through governmental loans, SBA guidance, state educational agencies support guidelines and supervision, as well as school district referrals, can create a new paradigm in education where educators are directly responsible for students' achievements at lower costs, higher instructional standards and at the same time create thousands of new jobs.

    May 18, 2011 at 10:34 am | Reply
  12. C. Cantu

    EDUCATORS CAN CREATE THOUSANDS OF NEW JOBS
    Everyone complains about public schools and their mediocre and expensive performance. I wonder if combining American ingenuity and entrepreneurship, this could change. I propose to create small "Charter Schools" by co-operatives of experienced and certified teachers who by joining forces and focusing on target students could deliver the expected quality education.
    Many new Charter Schools are now generated out of empty buildings, remodeled without fancy architecture, sports facitities, labs and technological devices and often by people who don't have the experience as educators but rather as entrepreneurs.
    A teacher' co-op where all educators share the same responsibilities, earn about the same reasonable salaries, without the tons of paperwork, state mandated programs, requirements and layers of administrators (who carry out inquisitorial supervision but no educational support) could be the solution.
    Many public schools have more than double the number of support personnel than they have basic core subjects teachers. Many ancillary and administrative positions earn more than 3 or 4 times the salary of an average teacher –without justificatory evidence and with no direct instructional responsibilities– and then blame teachers for student' low scores without providing solutions, support, assistance, or accepting their own responsibility. Many frustrated teachers, blocked in their ability to teach, become administrators, running very espensive programs without verifiable and long term accountability. Sports alone can take away 30% of a school budget.
    Making co-ops viable through governmental loans, SBA guidance, state educational agencies support guidelines and supervision, as well as school district referrals, can create a new paradigm in education where educators are directly responsible for students' achievements at lower costs, higher instructional standards and at the same time create thousands of new jobs.

    May 18, 2011 at 10:36 am | Reply
  13. Alena

    Most important thing in education is good teacher and what they posed to learn at school. Children must like what they hear and learn. Education is very good for people, for the country. Educated people earn more money and state economy grow up.

    May 18, 2011 at 2:04 pm | Reply
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  15. Johnny

    HEY BETCHES! you are all right!

    May 19, 2013 at 5:30 pm | Reply

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