The False Markets of Market Based Reforms

Posted on March 1, 2014



I’ve not spent a great deal of time talking about “corporate reform,” “privatization” or “market based reform,” mainly because I find these labels unproductive and oversimplified. Most of which occurs in our public and private sectors (also a simplification) and provision of public and private goods and services is far more nuanced – well beyond simple classification. Further, as I have noted on a few occasions, the rhetoric which emanates from one side or the other of these ideological debates is often entirely inconsistent. See for example, my explanation that strategies being promoted for public schools as derivative of successful private sector industry are anything but. That which is pitched as “corporate reform” is little more than failed private sector management.

A similar hypocrisy has been nagging at me lately, and I’ve touched on it, in part, on a few previous posts (here’s one). That is, there are sweeping claims that many of the policies being advanced these days are about capitalizing on the virtues of free markets – that we are trying to use the rationality that emerges from less regulated private sector markets to achieve more efficient production of high quality schools.

Enter charter schools and alternative pathways to the teaching profession.

Two interconnected strategies that are often discussed under this umbrella are a) the expansion of charter schooling and b) reduction of barriers to entry to the teaching profession through programs like Teach for America.

The argument is that by providing a fair public subsidy to charter schools (since their competition is subsidized and already established, giving them an unfair head start), we can induce competition improving both charter schools (via attrition of the weak) and public schools with whom they compete for students. Indeed, there is some empirical evidence to support this finding.

On the teacher labor market issue, the argument for reducing barriers to entry is that the market can decide whether it prefers the traditionally prepared teachers, or the alternative, creating competitive pressures for traditional preparation programs to improve and for alternative pathways to produce qualified candidates… those who can compete on a level, but less regulated playing field.

Casual, anecdotal evidence that both of these strategies are “working” to introduce positive market based effects, include evidence of long waiting lists – that is, high consumer demand, for charter schools in major urban centers. Others point to the fact that candidates from programs like Teach for America tend to get hired and quickly, suggesting high demand for their skills on the open market for teachers.

Ten to fifteen years ago, either of these arguments might have been supportable. Back when charter schools were still mainly upstarts, with a few emerging networks and back when alternative temporary teacher pipelines, while seeking exclusive arrangements with districts and some charters, still populated a balance of the two. But that was then and this is now.

Charter waiting lists in the current era are as likely to be policy-induced by deprivation and mass closure of true public options, where those closures are often based on bogus metrics used for declaring district schools as “failure factories.” Worse, these declarations of failure and disruptive intervention and bogus metrics upon which they are based are now codified in state policies promulgated in response to federal pressures (close the worst 5% you must and tweak your accountability measures you may).  Today’s charter waiting lists are as much a function of induced under-supply of public options if not far more so than local community demand for more charter options.

Surely if the government forcibly shut down Amtrak choosing some bogus measure to declare it an abject failure, there would be increased “demand” for other means of transportation along the N/E corridor and if the government forcibly shut the U.S. Postal service, other package delivery services would see a spike in their business. But I find it doubtful anyone would suggest that this spike resulted from a true market driven preference for their products or services.  Charter waiting lists in the wake of forced shutdown of district schools based on low average test scores, or even biased growth metrics, are no different.

Which brings me to my second point.  I’ve not written much on this blog about TFA, nor have I had cause to.  But the recent back and forth speculation on the potential role of TFA in Newark under the proposed reorganization and layoff plan (connected, or not?) led to some back and forth among local writer Bob Braun and TFA leadership, which brought out one blogger’s attempt to find a middle ground in the debate.  This blogger, responding to the twitter trending of #ResistTFA brought up an argument on behalf of TFA that I’ve not heard in a while. That is, that education schools should learn from the market based successes of TFA, specifically “why do principals and schools still line up to hire TFA corps members when they have the chance?” I must admit, I’ve been complicit in making similar arguments in my own research in the past. (here & here)

The implication in this blog post is that TFA has, by virtue of producing high quality candidates, outpaced the competition (traditional preparation programs) on the free market – the open labor market for teachers. This would be all well and good if the speedy placement of TFA candidates had anything to do with an open competitive labor market, but it doesn’t.  And I’m not entirely sure I fault them for that. I only fault their advocates for not acknowledging that.  And, I would suggest that many traditional ed schools also operate in relatively close relationships with local public school districts.

My problem with the current false market scenario regarding TFA is its intersection with the false market for charter schools. Just as charter school expansion – demand – has become heavily dependent on manipulation of markets by policy makers, TFA expansion – demand – has become dependent on those major charter network operators who are dependent on charter market manipulation (forced closure of district schools).[1]

Put simply, this is not market based reform, nor should anyone pretend that market mechanisms (rather than policy preferences and market manipulation) are driving any of this.

Yes, it is reasonable that we might experiment with public subsidies to private providers, be it through direct private management under district contract, or via upstarts like charters (by their original intent). And yes, it is reasonable to test out alternative pathways to teaching.  But when we start forcibly shuttering the public system, under the facade of federally promulgated state policies, and replacing the only true public option with private providers who then establish exclusive arrangements for alternatively prepared short-term staff, we’ve gone too far.

When we start claiming that these shifts are happening due to free market forces and public demand, well… then we’re just full of crap.

It’s time to put a stop to this and rethink where we’re headed before even more damage is done!


[1] It may be that the long term financial viability of major charter networks depends on both incredibly high employee churn and placement of alums in future positions of political power (to continue rigging markets in favor of the institutions that hire them). Churn is required because, as I’ve explained in previous posts, many well-established charter operators actually pay pretty good salaries over the first several years, outpacing local district schools by 20 to 30%, while also offering small class sizes. It is hard to conceive of how these schools would balance their operating budgets were they to retain these teachers much longer than the usual 2 to 5 years. Further, charter advocates in NYC like to point to the exorbitant retirement costs of the city district as one reason why charter spending is actually lower (even though it’s not) than district schools. I’ve noted several times that it is rather absurd to compare a fully matured district with thousands of retirees to an institution less than 10 years old that likely has no retirees as of yet. Presumably they would, eventually, unless of course they can churn, churn, churn.  TFA helps them accomplish this goal.

About these ads
Posted in: Uncategorized