Wednesday, 23 July 2014

A Better Way To Shop For Schools

After posting my NHS blog and my smoking blog to demonstrate the brilliance of the free market, I'll finish what has turned out to be a trilogy with education - another good analogy for the quality of the free market and the impediments of State-run institutions. Most children attend government-run or government-funded schools, with a minority attending private schools.

The basic problem with our State-funded education system is that market competition does not really exist, so there is little incentive for schools to win business. If HMV fails to provide the goods and services customers want, it will go bust. Other providers, like Amazon and Play, will procure their customers. The competitive free market explains why incentives are plentiful, and why every product under the sun has improved over time yet also proved lower in cost. This is what is so marvellous about the market of supply and demand - people vote with their wallets, and firms that don't improve the quality of their goods and the allure of low prices will struggle.

Schools, on the other hand, are not currently being made efficient by such market forces. A failing school doesn't lose many customers, and its failure is likely to result in more taxpayer expenditure in the form of fines or more central government money thrown at it. This, on the whole, is the distinction between private and public sector institutions: injected finances into private sector services are usually an indication of success; injected finances into public sector services are usually an indication of failure. Not always, but usually.

Let's look at clothes as an illustration. Consumers have a vast array of desires and needs when it comes to what they wear. Evidence of this is found in the fact that the supply market for clothes is multifarious in its variety of sizes, colours, styles and prices. When market competition is replaced with government funding, consumers' preferences take more of a back seat, with politicians' preferences firmly in the driving seat.

Some people argue that the problem with a free market ethos in education is that if you're from a disadvantaged background you probably have less of a chance of thriving in a school environment, and the free market is only likely to make this worse. The reality is, the opposite is more likely. Children from disadvantaged backgrounds clearly are failing the current curriculum - but that suggests that the curriculum is not designed to tailor to their needs. More of a free market ethos would be the medicine to the ailment, not the poison. The evidence is that the 'one size fits all' government method is failing disadvantaged pupils. An education system that had the diversity to cater for a wide range of needs and abilities would be much better. In fact, my school serves as a good microcosmic example - it had a diverse range of pupils from all sorts of backgrounds, and many good teachers whose speciality was getting the best out of pupils who weren't so naturally gifted or pupils whose background was not conducive to academic excellence.

The injection of free market qualities would help all kinds of pupil at a wider level. Of course the market isn't an education panacea - there will always be problems. But this is because parents and social background play a lot bigger role in shaping youngsters than teachers and education authorities do. Pointing to the problem of young people in general when they are disadvantaged is not a criticism of the now departed Michael Gove's school policies. There are many cases of benefactors investing in free schools that contain lots of these so-called disadvantaged pupils, and the indications are that they are going to outperform State-schools (charter schools in America are following a similar pattern)

Go back to my clothing illustration and imagine how much better things would be if parents had the kind of supply of schools that clothes consumers have for clothes shops. I can get a lot of my shirts from High & Mighty because I am 6ft 7 and full of style and sexual charisma ( ;-) ). If every clothes shop was like Primark or Gucci, then clothes shopping would be hell, because variety is what makes us all catered for. Similarly, children from disadvantaged backgrounds - children so obviously not engaging with the current State curriculum - would be much better catered for in a market in which providers could specialise in tailoring their curricula to their needs.

I met a lady on benefits recently whose food is funded by Tesco vouchers. The government provides those voucher funds but it does not tell her which foods to buy, because it doesn't know her preferences better than she does. Similarly with education; it should be supplied by schools competing for the patronage of parents. Schools that had to win the business of parents would be an awful lot better than schools that received business irrespective of quality. That's as a much of a sine qua non as saying that a nationalised supermarket or clothes store would be lower in quality and less customer-focused than private ones.

* Photo courtesy of