- The Privatization of the Educational Production and Consumption System

This idea about how market competition can fuel significant innovations and productivity gains across an industry or even an entire economy has supported many of the recent efforts to “privatize” the educational sector. The critique of the existing system of centralized efforts to create a dynamic, innovative, learning organizational field in the domain of education was that the centralized control by the government, influenced by the knowledge of existing professionals or social science researchers had become too stagnant, too slow, too risk-averse, and insufficiently responsive to the true customers of the system – the parents and students. What was needed was a system that empowered the customers, allowed many more flowers to bloom more quickly, and was able to push more resources to the blooming flowers and take away resources from the fading weeds. Sustained by this idea, a whole group of dynamic “ed entrepreneurs”, supported more by private philanthropy than government, and operating at the boundaries and edges of the education profession rather than manning the center grew up in search of the “better mousetraps” that could improve educational outcomes.

######## A Quick Functional Comparison of the Two Systems

It is useful to draw a quick, functional comparison of how this system was supposed to create an educational system that could produce steady productivity gains compared with the government supported, central research and development system.

- 1) Unlike the centralized research and development system, the decentralized market system did not insist on holding onto a social point of view that could take account of system level effects of educational innovations; or, perhaps more accurately, it assumed that all the important system level effects could be observed at the individual level and simply added up to reveal the social level effects.
- 2) To the extent the decentralized market system did take a social point of view, and account for the performance of the system as a whole, it did so through the use of nationally administered standardized tests of academic achievement that measured how successful the system performed in getting students above particular specified levels of achievement.
- 3) The decentralized market system did not necessarily pay a lot of attention to the detailed character of the innovations being tried. The reasons were two. On one hand, the innovations were too many and too detailed to permit central cataloging. On the other, the innovations were treated as the proprietary knowledge of the innovators, and it was assumed that an important reason for innovating lay in the prestige or money that could come to the individuals or organizations who invented the ideas.
- 4) The decentralized market system was similarly somewhat disinterested in the effects of a given innovation; they could assume that valuable results would be observed by the educational consumers, and that if individuals were allowed to choose educational providers, the value of the educational service would be revealed in the choices they made to go to one service provider rather than another; the market could provide a guide as to value that did not need the complicated processes of program evaluation.