Education markets and Betsy DeVos

As many ex-Soviet people are, I am suspicious of big governments, social engineering, and believe in free markets. Russians of my generation just saw their fair share of the socialist economy, and authoritarianism that inevitably follows a utopia. However, as an educator, I see clearly that education markets are different that other kinds. Of course, people in health care economics can put together a convincing case that health economy market is also different. And the utilities markets are different, and airlines is different, not to mention pharmaceuticals, and of course, the agriculture. And did I mention the labor market, so-so different? What are they different from? There is no one classic market model; what we have instead is a set of very unique industry-specific markets, each operating within its own set of constrains, sometimes poorly understood.

Here lies the problem of market ideologists like Betsy DeVos. Their belief in the universal power of markets is at the ECON 101 level. They do not understand the economic segments deeply, and operate at the abstract level of the “classical” economic theory. Less regulations, more competition – is all they know. Hence, for example, the recent decision to roll back regulations aimed at curbing the college loan bubble fueled by for-profit colleges. I am not an economist either, but know enough to be dismayed. So, you want to roll back a policy, fine, but how do you intend to address the problem the policy was set up to address? John Akerlof, for example, has shown back in 1970 how markets can quickly degrade with the information asymmetry between buyers and sellers. Higher education is exactly the kind of the credence good that creates the problem. Deregulation plus loose borrowing rules is exactly what brought the higher education to the brink of another bubble, threatening the economy. The same story is school vouchers: they should have worked in theory Milton Friedman developed. But they do not work, because Friedman underestimated the specifics of the school markets. He thought schools would compete not on price, but on innovativeness, and ultimately, quality. It turns out, innovations and quality gains are very hard to achieve without student selection. And the message of quality is subject to the already mentioned Akerlof’s “Lemon Law.”

Like any ideology, market ideology is deaf to nuances, and ignores the messy state of our knowledge about how markets work and do not work. Ideologues all need to go back to school, and learn enough specifics before they can make federal policy.

The end of the educational reform?

Here is my report from AACTE’s Day on the Hill event. Democrats are in a defensive mood; their priority is to preserve whatever education funding they can in response to the administration’s aggressive cuts proposal. The legislative branch in general seems to have lost appetite for educational reform. The only new initiative comes out of Jack Reed’s office. It is a bill to reform the Title II of the Higher Education Act. Some improvements to the TQP program, report streamlining, incentives for states to close down poor teacher preparation programs. This is hardly revolutionary, or even ambitious. The era of big by-partisan reform efforts seemed to culminate in the Race to the Top and NCLB waiver programs. The administration voucher initiative is unlikely to receive support among democrats and many Republicans. The idea is not new, have been thoroughly researched and found ineffective, and just politically hard to implement because of the states’ control over much of educational funding.

The pause can be explained by a combination of two things: The President does not have education as his priority, unlike the four Presidents before him. And even if he had ideas, the administration seems to be paralyzed anyway. However, I think there is a second, much more profound reason: no one has ideas anymore.

In the last half-century, there were only three big ideas for education: choice, technology, and accountability. All three turned out to be duds (For more detail, see this book, when it comes out). The school choice concept had all the markings of a brilliant economic reform. However, have no evidence it works. The positive effect is at best, minimal. The accountability may have some limited positive effects on student learning, but again, not nearly of the scale the reformers were hoping for. In addition, it has significant side effects, including the suppression of grass-roots innovation, which are hard to measure. The information technology does not yet seem to affect the academic achievement. The global education community has tried the three reforms in various combinations, with about the same negligible result. What is next? - Literally, no one knows.

Correction; the ideas people have seem to be a bit plain, a bit boring, a bit common sense. For example, in educator preparation, we have known teacher induction to be the weak link (the economics of it does not work). Well, try to push a massive education bill through the House and the Senate, focusing on induction. Good luck. We also have learned from well performing countries that teachers do better if they have independence, more control over their work, meaningful professional development, opportunities for team work. OK, how do you legislate that? Pass a law to respect teachers? Mandate getting rid of useless PD, and replacing it with good PD? Somehow, none of these seem politically feasible. The other large chunk of the real agenda is addressing children’s lives beyond school – poverty, chronic stress, health, nutrition, family support, residential desegregation. Yet no one had at the federal level had an appetite for such things for a long time. In fact, all the educational reforms were implemented in hope that the government won’t be doing the hard things.

I am not pessimistic. The challenges we have are actually exciting. How do you improve education without the Federal government? How do we formulate ideas for change that don’t just make sense to educators, but also engage wider political forces? How do we make education an agenda item?

These are times to think big, to think fresh, to shape the future.

How can education drive city development?

For years, the thinking in mayors’ offices (and chambers of commerce) was straightforward: Increate test scores in K-12 schools, and your population will stop leaving for suburbs, and the city economy will grow. Such logic seemed unassailable. Among other things, it created a vicious cycle of hiring strong, charismatic superintendents. To be hired, they had to make unrealistic promises of quick fixes, and dramatic increases in test scores. Within a couple of years, boards become disillusioned, unions put up a fight, and everyone is looking for another charismatic hero, who will have the magic.

There is no magic. Test scores are very stubborn thing; they take years and years of slow, invisible work to budge. They are determined largely by the demographics of student population. All miracle cases have to do with gentrification; all collapses have to do with middle class flight to the suburbs. Reforms, accountability, school choice – all а these have only marginal, almost invisible impact, at least in the short run. I wish it could be different, but it is not. Some people out there, like Eric Hanushek, are still looking for another silver bullet; in his case, it is the idea of firing poor performing teachers. Others like Betsy DeVos, are still hoping against all evidence that vouchers will deliver radical improvement. Both are very much mistaken.

I was thinking all this while listening to West Sac mayor Christopher Cabaldon’s powerful speech last week. I was invited thanks to Steve Lewis to their State of the City event. I think he is on the right track with the Homerun initiative. If you read it carefully, it focuses not on schools, but on everything else that goes into student performance.

One more thing he and other mayors should consider is the innovation dividend. Tests we use in public education are very powerful, but incredibly narrow measures of student success. The further we move towards the knowledge-based economy, the less adequate they become to measure the work force readiness. While many research groups work on measuring the 21st Century skills measures; none is yet good enough and cheap enough to impact instruction. While we wait, the next best thing I to stimulate the low-level, grassroots innovation among educators. Such innovations are no more likely to increase the standardized test scores than the top-down reforms. However, the very engagement in experimenting, in trying something new is likely to be passed on to students. We can expect students of an innovative teacher to be a little more open to change, more creative and innovative, more able to communicate, to collaborate with each other. While I cannot yet prove this claim empirically, this is the best direction for the K-12 education I can see right now. The grassroots innovation is actually fairly inexpensive, if you compare it with staggering costs of accountability reforms. They go well with teacher professional development and induction, which remain the weak link in the school improvement efforts. Mayors and superintendents everywhere should think about it. There is no need to give up on schools; you just need to try a different approach.

Parents make school choices, and ultimately, residence choices not only on test scores, but on overall reputation of a school and a district. Are they interesting? Innovative? Good for children? Have something unique to offer? Such reputation is built with grassroots, wide-spread innovation. T also tends to make teachers happier, more in control of their work, and more likely to stay.