Markets in education work

Patrick Gibbons

Dr. Eliot Parker (an economist at the University of Nevada, Reno) says we are undercutting our future with the budget cuts to higher education (less than 3 percent of the overall budgets). He believes we need taxes and government-run schools because markets don’t work:

So why do we need public universities in the first place? Free markets are wonderful at giving more to those who already have, and private universities such as Harvard and Stanford are among the best in the world. But as my colleague Maureen Kilkenny, a respected economist in a department slated for elimination, says, “markets can do nothing for people with nothing.” For those who lack education, skills or family wealth, the free market offers little hope for improvement. By paying taxes to provide education, we help to level the playing field.

There is no easier place for Dr. Parker and Dr. Kilkenny to prove their point than by examining the poorest places on planet Earth. If they are correct, we should see the poor either suffering with unaffordable private schools or succeeding with free government-run schools. We’ll focus on K-12 education because without a foundation, no one can go to college.

Fortunatly for the poor, Parker and Kilkenny’s thesis is incorrect. Dr. James Tooley’s work (see the video above) shows that some of the poorest people on the planet are building low-cost private schools to compete with the free public schools. Dr. Tooley has tested the students and found that many of these private schools outperform the public schools, some of which do so for just $1 a week.

The reality is: Markets work. Government-run schools fail precisely because there is a distinct lack of market activity. Higher education (like K-12) needs to emulate the market and adapt, not resist change to sustain an outdated, 19th Century model for education.