Closing the Teach For America Blogging Gap
Jan 03 2013

#61: Schumpeter, creative destruction, and imposing markets in education

I’ve taken a decidedly more strident tone as of late, so I want to spend some time examining why this is so.  It’s not that TFA or education reform as a whole has changed much in the last couple of years, but my analysis of it certainly has.  The longer I spend in the classroom, the greater emphasis I place on the importance of relationships and community and care.  I tend to think of these as values which often run afoul of the values of the economic elite like austerity, efficiency, or being data-driven.  I see the former group as necessary tools of being an educator and the latter as the tools of an economist.

What I’ve done with this post is explore the conflict behind the corporate reformers and the educators they seek to impose their will over.  In it, I hope to prove that the aims of corporate reformers and those of educators are necessarily at odds with one another.

Introduction to Market-Based Reformers

The corporate reform movement is an attempt by a group of wealthy philanthropists to impose market forces where there had previously been none or had protections against them.  The policy instruments they support are: data-driven management designed to weed out undesirable employees and reward superstars; school choice models(1) designed to foster competition for student enrollment and their tax dollars to bring down costs and improve customer satisfaction(2); weakening teacher unions to allow for greater labor market flexibility(3).

This tribe of reformers resolves that market-oriented reforms will offer a better, more varied and customer-pleasing product.  Or, it will deliver at least the same quality of product for less money.  And, in doing so, these reforms will yield a more equitable education for children in low-income households because parents will not be forced to send their kids to the substandard schools available in their neighborhood.

The Intentionality of Disruption

The argument that such reforms will be disruptive, lead to job loss, would cause total havoc to the education system as a whole falls on deaf ears.  One of the staggering capabilities of markets is their capacity for creative destruction, a term popularized by the economist Joseph Schumpeter.  Because of the efficiency of markets to adapt to consumer demands, the products, services, and firms of one era will almost certainly fall prey to the changing needs of the markets.  One company rises (Microsoft), another falls (IBM).  An innovation captures the imaginations of millions one generation only to crumble mere decades later (Polaroid).  This is good for us because we reap the benefits of this relentless creative thrust.  Things get better, faster, and cheaper, and our lives are made easier and more fun.

For market-based reformers, the destruction of public education is not a bug; it’s a feature.  Like a phoenix out of the ashes, a new, robust, monetized educational system is something to be desired so that — finally — schools can harness the awesome power of private markets.

In order for markets to work and not descend into some corporatist public-private hybrid, the role of the entrepreneur is essential.  They are the risk-takers.  They strategically gamble on the novelty of their ideas, on the notion that there is a group of people out there who want what they can provide and that no one else is providing what they’ve got.  In the last half-century, these are the Gates, Jobs, and Zuckerbergs of the world, risking the security of a sure-thing job at an established firm for the possibility of striking gold on your own.  This risk is what makes innovation possible and is what drives the dynamism of markets.

My question is this: are the roles of educator and entrepreneur mutually compatible?  Can one be both risk-taker and caretaker?

Risk-taker v. Caretaker

As a caretaker, I value stability, engendering trust, meeting the needs of someone else before my own, and cooperation.  The risk-taker values reward, self-interest, recognition, and accomplishment.  I think a Venn diagram between the two roles would show an intersection for things like cooperation, recognition, and accomplishment.  But I think of cooperation as an end for the caretaker and a means to an end for a risk-taker.  For accomplishment and recognition, it’s vice versa.  My interest in personal accomplishment is a means to the end of improving the lives of my students.

I feel that the corporate reform movement doesn’t value things like trust or stability or meeting others’ needs because they are very difficult to quantify.  Note the reforms they support in the introduction: employee management based on test data, competition in school markets, labor flexibility.  All of these things can be measured using dollars, student enrollment numbers, or standardized test data.

How do I know my school is successful?  The caretaker will talk to you about conversations they have had with parents and students, the sense of joy and love they have in their work, the great progress their students have made towards adulthood which may or may not be college-focused.  The risk-taker will point to their numbers: test scores went up, student enrollment went up, revenues went up.

This poses an interesting challenge for the market-based approach to schools.  If we measure schools on their metrics alone, where do we find the market winners and losers?  In other words, where are the good schools and bad schools in a market system?

Good schools v. Bad schools

Let’s take a look at students who move frequently versus those who stay put in one location.  The creative destruction of markets means schools will open and close with fluidity.  The bad ones won’t have enough customers, the good ones will open up more campuses or expand existing ones to meet consumer demand.  There will be students who find themselves in the middle of this tumult more so than others.  Those students will also be bouncing between teachers and their different teaching styles, perhaps different curricula, different sets of rules and consequences, different peers and friends(4).  Because the schools don’t have to keep them, kids with behavior challenges will bounce more than anyone.  The public schools will become the last bastion for these students and others with special needs.  Those who have a stable school home will have better social and better academic outcomes and these will often be the children of parents who can afford the “good” schools much like the parents who can afford “nice” homes today.

My guess is the “bad schools” in the market will often be located near the “bad schools” of today.  This is because the supposed goodness or badness of schools has less to do with the staff or administration or innovations like long hours and days and years, or with some magical properties of the school building itself.  No, school quality comes down to peer effects.  This is how it works when we describe “nice” neighborhoods or churches or grocery stores.  You want to know what makes the “nice” HEB so nice, why the store is cleaner, why it offers a greater diversity of products that are healthier than the HEB down the street from my school?  Give me a minute…do you think it’s because its customer base is wealthier?  You mean, it’s not because the store managers or cashiers are less capable or because the west side HEB patrons just aren’t motivated enough to want 75 varieties of hummus(5)?  Of course not.  This is just the market at work.  The market doesn’t care about equity, period.  The market responds to the demands of its consumers.

Contrary to the wishful thinking of education reformer grandpappy Milton Friedman, if the market demands even more segregation than is currently available in government schools, then so be it(6).

If a neighborhood has “bad schools,” they’ll just have to adapt by getting rid of low-performing teachers and students until they are good.  And those low performers will be thrust back into the marketplace to find a new home, even though every other school will succumb to the same pressures.  The public school will necessarily become the dumping ground for the most challenging or expensive to teach students.

Contrary to the theoretical model put forth by free-market ideologues, markets do not yield more equitable results.  The gulf between the “good” and “bad” schools widens because of the inherent segregating properties of market forces.

A Cost-Benefit Analysis of Creative Destruction in Education

Let’s think about what is lost in this creative destruction.

  • First and foremost, kids lose.  Since charters are not public schools, they will lose their constitutional rights.  Many more kids will lose art, physical education, music, journalism, debate, dance, creative writing, a variety of foreign languages, and any other class that is not tested, not considered “essential.”  Students will profound special needs will be further segregated from non-disabled peers because so few schools will want to take on the additional responsibility.  Students with language needs will languish trying to find a school that will take them and meet their needs appropriately.
  • Parents lose their voice.  They are granted a voice as customers, but this is illusory.  They are subject to the availability of what the market provides.  If they are dissatisfied, they move to another school.  This is rough on the kid and on the parents who now have to shop for this other school, possibly in a neighborhood they of their child can’t get to easily.  If the school is not satisfied with the student, the student can be booted out in spite of parental protest.
  • Teachers lose their voice.  As labor participants, we are given a choice of where we want to work, but without organized labor to speak on behalf of workers, the market will dictate wages and hours.  The private school, either for-profit or not, will have incentive to remain competitive, trimming the fat wherever possible.  The bulk of a school’s operating cost goes to personnel.  This means teachers get their salaries cut and their hours extended.  And when that happens, it’s our fault because these are the schools we chose to work in.  This is what we signed up for.
I don’t want to suggest that no one would gain from such a system.  Parents of certain religious inclinations would now have government funds to send their children to parochial schools, and market reforms would certainly aid those parents who wish to include a spiritual element to their child’s curriculum.  However, there’s the whole separation of church and state thing to worry about, not to mention the lunatics who teach creationism as science.  With vouchers, parents who already send their kids to private schools now have a subsidy to do so.  So it’s regressively redistributive, but hey, rich people get harangued all the time, isn’t it time they got a break?  And, let’s not forget the windfall of business opportunities for-profit endeavors would have access to(7).

The Future of Education Reform

How should we proceed then, as caretakers or risk-takers?  What do we value in schools and from teachers?  It is my view now that these roles are inherently opposed to each other.  If we are to seek equity, social justice, and equality of opportunity for children of lesser means, then we should reject the suggestions and impositions of the corporate reform movement steadfastly.  We ought to limit the influence of misleading or useless metrics such as census standardized test scores and recognize the folly of competitive markets when what is at risk is not mere capital but human beings with complex lives.  We ought to push for reforms that empower all families to be involved in their children’s education and success in schools, that seek a level playing field, that work to integrate all walks of life into a community of equals.

The risks are too great to pursue the destructive ends a market will wreak.  The stakes are far too high to pursue anything less than equity for our kids.


(1) Charters schools and voucher programs.

(2) Ostensibly parents and children.

(3) Including, but not limited to, diminishing or eliminating the importance or necessity of licensure.  Hence preferences for TFA, alternative certification programs, and charters, all of which circumvent the market artifice of traditional teacher certification.

(4) Assuming the gubmint keeps their dirty hands off standards altogether.  Oops, sorry libertarians, this one is not coming close to happening.

(5) DING DING DING!  For getting this question correctly, you get a buy-one-get-one-free coupon for Pita Pal-brand hummus.

(6) The late free-market guru Milton Friedman fretted that no true universal voucher program had ever been instituted in the United States and therefore no real reform would occur.  He also believed that such a voucher system would allow parents to get their kids out of low-performing schools and improve the education of those students.  Well, Chile has had a universal voucher system and, quelle surprise, the vouchers have “exacerbated segregation between schools and between types of schools.”

(7) To be denied decades of government largesse only to suddenly be afforded access to millions of kids with shiny golden tickets in their hands worth $5000 a piece…you know the investment world is salivating at the opportunity.

6 Responses

  1. Educator

    Wow what a post! You must have an economics background?

    What I tell folks who criticize reformers is….the close the achievement gap reformers are getting what they want. They want low income mostly minority students to get the same standardized test scores as middle class mostly white students. And they are sorta doing it in small pockets (although I think they’re cheating by kicking out SPED/ELL/Difficult students). But there’s a cost at how they’re doing it, as the focus becomes test scores primarily. Hence, you see no excuses charters where students are basically controlled, and where non quantifiable things get thrown out the door, like civics, music, sports, theater, etc…
    (I know there are charters who are more balanced, but many aren’t)

    So the question becomes — Is this what low income mostly minority students need to have the same opportunities as middle class students?

  2. Educator

    Another thought that us more related to your post.

    As market forces increase in schools, we’re seeing segregation increase. I had thought we in America decided against segregation a few decades ago?

    So, there are costs to bringing in market ideas to education. These are real, but they’re harder to quantify. Ex: Segregation, a student being part of a student theater club, etc….

  3. This is an awesome post.

    Underlying the care- vs. risk-taking ethic is that a market system assumes and creates winners and losers. It’s a competitive model. It argues against sharing information and building collective skill throughout the system. An ethic of caretaking supports all schools and learners in creating a public system that succeeds for everyone.

    I can’t accept a system that assumes failure for some, so I am not really interested in moderated and bipartisan discussions with corporate raiders dabbling in education. Ultimately, I think that what education reformers want threatens civic democracy. (Nor does it help that they are actively after my financial stability and work-life balance.)

    What I find most difficult about this discussion is that it seems to me there are ample reasons to question whether or not the modern “free” market system has been entirely successful (or at least to discuss what exactly it has been successful in doing). Yet it’s taken for granted that its precepts are applicable in and positive for public education.

  4. It would be a fallacy to describe the Military Industrial Complex as a market-based system.

    And it will be just as bad a complicity in mystification to describe the Training Industrial Complex as a free-market arena.

    • Yvonne

      Great one, Jon.

  5. Tom Stark

    There is some truth to this post, but there is clear ideology peeking through. The truth of the matter is that teachers are not being provided with enough time to actually teach academic subjects because they are too busy being parents to many kids (not all). The argument about moving around is a bit specious when one consides the thousands of high-achieving military brats who move on average every couple years and still manage to achieve great academic grades. That is a good tip-off that they real problem is the effort by progressives to minimize the parent and the importance they play in shaping their children, eliminate any meaningful moral code (there is not and never has been a “wall of separation between Church and State”), and force upon society an “equal results” approach instead of an equal opportunity approach which has produced more progress and innovation in this country than the previous 5000 years. The truth is, schools/teachers have become baby-sitters too busy to teach. They have no authority to maintain discipline, and cannot achieve their desired result of educating students in the current state of the schools. Creating things like Common Core will only exascerbate the problem as it, too, teaches to the test. So a place somewhere between the comparative extremes described in the post is probably closer to the ideal. Teachers who go through the motions should be moved out of the system to make room for the inspired ones who have more interest in teaching than holding a job. At the same time, making the children’s test scores determine a teacher’s future in today’s world will result in arbitrary decisions that have no place either. Not everything that is new is good and not everything that is old is bad. Local control, traditional values and emphasis on personal responsibility are not things to be scorned. We used to be #1 in education around the world when those things were the standard. Think about it.

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