Marketization

(Question: What do you imagine would happen to the price of a Honda Civic if the federal government gave every young person in the country ten grand and a subsidized loan that could only be used for the purchase of a Honda Civic? My guess is that the price of a Honda Civic would go up enough to accommodate all the money that was on the table.)

The K–12 education system is an almost exclusively government-run enterprise, too, and it, on the other hand, is a mess. What’s the difference between the low-performing K–12 system and the world-beating higher-education system? There are of course many factors at work: College professors enjoy higher social status and (often, not always) more generous compensation than do eighth-grade art teachers, and the standards for becoming one are (often, not always) higher. But certainly consumer choice is among the most important factors. Students have a choice about where they go to college, and they take their money (public and private) with them wherever they go. Outside of a few cranks such as me, nobody talks very much about fully privatizing K–12 education in the United States. Instead, what most conservative reformers emphasize is introducing consumer choice into that social enterprise, making K–12 more like college in terms of its economic incentives. There isn’t really a socialism-vs.-capitalism aspect to that. The real underlying issue is what the Nordic reformers sometimes call “marketization,” bringing choice, competition, and accountability to state-dominated enterprises that once had been monopolistic, with all the dysfunction and woe that goes along with that.