There’s Got to Be a Market
The supply side of school choice.


Frederick M. Hess

Conservative school reformers love to talk about giving families better options. As President Bush said, way back on the 2000 campaign trail, “If the schools are not teaching children, then something has to happen. We cannot continue to pour money into schools that won’t teach. As opposed to subsidizing failure, we ought to free the parent to make a different choice. It could be a public school. It could be a charter school. It could be a tutorial. It could be anything other than the status quo.”

Of course, this idea presupposes that some of those alternatives will be good ones. The sad truth today is that so few of them actually are. While the past five years have been a time of remarkable activity in K–12 schooling, far too little of that energy has focused on the supply side of school choice – creating great new schools and providers.

The federal No Child Left Behind Act has driven the national debate; and while it has illuminated the extent of our educational problems, it has channeled much of the remaining energy into testing, number massaging, and compliance. Capitalizing on this new environment, a double-handful of vigorous problem solvers like Arne Duncan in Chicago, Joel Klein in New York City, and Paul Vallas in Philadelphia have risen to the challenge. Even in these pioneering districts, however, helping good new schools open and expand is mostly a sideline.

Meanwhile, charter-school enthusiasts, including President Bush and Secretary of Education Margaret Spellings, have touted the remarkable work of the high-performing KIPP Academies and the new teachers recruited by Teach For America. However, these entrepreneurial ventures are gnats alongside the $550 billion a year behemoth that is K–12 education. After 15 years in the business of recruiting high-achieving college graduates to teach in troubled schools, Teach For America deploys just 3,500 teachers each year within a public-school workforce of 3 million teachers. KIPP, despite its fame and widespread demand, has so far given its esteemed brand label to just 52 schools in a decade.

Similarly, the much-praised New Leaders for New Schools produces about 150 new principals a year while operating in just six districts. Fourteen years after its founding, Edison Schools is running only 157 of nearly 95,000 U.S. public schools. And these are the big brands, the GMs and the IBMs of the education world. Other exciting, new, for-profit and non-profit entrants operate in near obscurity. Outfits like the National Heritage Academies, Big Picture Company, Aspire Public Schools, Wireless Generation, and Green Dot Public Schools are familiar only to the most rabid of the education cognoscenti.

While reformers and public officials are happy to conduct photo-ops at these schools, they show little interest in figuring out how to help them thrive — and even less in helping the public understand why the supply side should be discussed at all. In truth, Americans like their schools and recoil from talk of radical reform. Gallup’s annual poll of attitudes toward K–12 schooling reports that adults, by a four-to-one margin, say they would prefer “reform efforts” in their child’s current school — even if it’s low-performing — over the chance to move their child to a higher-performing school. By a three-to-one margin, adults prefer “reforming the existing public-school system” to “seeking an alternative” to today’s public schools.

In other words, Americans aren’t inclined to question comfortable, but stifling arrangements when it comes to schooling. But serious reformers and choice advocates need to challenge that mindset — not cater to it.

Conservatives too often lapse into sentiment when talking about K–12 schooling and school choice. Educational entrepreneurship cannot be reduced to simple proposals for charter schooling or school vouchers. Ultimately, supply-side dynamism isn’t about “choices;” it’s about Darwinian selection and creative destruction. While Belgium, for instance, has one of the world’s most expansive choice-based educational systems, few observers would deem Belgium a hotbed of educational dynamism.

Market enthusiasts typically romance the demand side when talking about educational choice: waxing lyrical about helping disadvantaged families escape mediocre schools and allowing students with special needs to select appropriate programs. Meanwhile, they’ve given short shrift to crucial supply-side issues like whether good providers will emerge, how to create conditions hospitable to entrepreneurs, and what’s needed to create a dynamic educational marketplace.

Vibrant markets in any sector require entrepreneurs, adequate capital, skilled employees, entrance to markets, and so on. Creating good new options requires opportunities for entrepreneurs to enter the field, obtain resources, recruit talent, try new approaches, develop new products, compete fairly, and benefit from their successes. Choice fosters entrepreneurship only to the extent that it promotes these opportunities.

One reason to be cautious about putting excessive faith in choice is that consumers’ ability to guide new product and service development is limited by their experiences and their ability to imagine possible innovations. When radio technology was first introduced, it was primarily regarded as a souped-up way to transmit Morse code. Not until David Sarnoff’s 1915 suggestion that it could be employed to broadcast news, music, and baseball was the new technology really exploited. Business scholars Dorothy Leonard and Jeffrey Rayport have observed that previously, “No one asked for broadcasting because they didn’t know it was feasible.” Choice-based reform that is inattentive to entrepreneurial considerations is unlikely ever to yield truly transformative solutions.

Ultimately, given the landscape of K–12 schooling, choice-based arrangements are not enough to unleash dynamic supply-side activity. They are only one step toward nurturing entrepreneurial action. Voucher plans have done almost nothing to help entrepreneurial providers like KIPP, Teach For America, or their peers. In fact, technology and service providers find it far more cost-effective to deal with large district clients than fragmented clusters of choice schools. Meanwhile, charter laws do little to help invite venture capital into the sector, remove burdensome reporting requirements, provide essential infrastructure, or help attract the personnel these efforts need to flourish

School choice is one important step in revolutionizing American education. But it is only a first step.

– Frederick M. Hess is a resident scholar and director of education-policy studies at the American Enterprise Institute. He is the editor of the recent book, Educational Entrepreneurship: Realities, Challenges, Possibilities.


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