Free Education Marketplace

Picture this: an educational system in which parents decide what, where, by whom and for how long their children will be taught, a place where educators and parents voluntarily associate with one another, as well as the incentives that encourage families to be diligent consumers and educators to innovate, control cost and expand their services. Sounds like some kind education utopia, right? Not exactly, but a free education market could radically change the way school systems are presently operating.

The Center for Educational Freedom at the Cato Institute recently completed a study, The Cato Education Market Index, to measure how closely existing school systems in all 50 states resemble free markets and rate education policy proposals on how conducive they are to the rise of competitive marketplaces. The not so shocking news…. not one U.S. state currently has anything resembling a free education marketplace.

Government standards and regulations vary according to the public and private sector. Cost, curriculum and testing policies vary among schools, thus causing The Index to review data separately from four different types of schools: Conventional Government Schools, Alternative Government Schools such as charter schools, Voucher-accepting Private Schools and Non-voucher Private Schools. Most notably absent from the list are homeschooling and tutoring services due to lack of relevant data (The Cato Institute will add in the information at a later date as it becomes available).

The Index also rates each of the four types of schools in two distinct areas: market and policy. A market rating means how closely the existing school system models a true free market. A policy rating accesses the “market-friendliness” of education policies, including those that are already established and new education reform proposals as well.

Wisconsin and Connecticut, the two equally top scoring states based on market freedom score 26 out of 100 (100 being a free education market). Idaho, South Dakota and Florida are also listed in the top five of actual free markets. Even the top scoring state barely scratches the surface of what a true free education market is.

As far as free market policies go, Texas, Wisconsin, Arizona, Minnesota and California scored in the top five highest policy ratings, with scores of 29 & 30 out of 100. The common denominator of these top scoring states… all have charter programs that do not cap the total number of charter schools that can be created. Meaning, the charter school idea will spread and more people will have access to it. Again, these low numbers show the free education market has a long uphill battle ahead.

The Cato Institute research concludes that the U.S. education system is dominated by state-school monopolies that, because of their government- funding advantage, have reduced the private sector to a tiny position. Primarily, the Cato Institute hopes that with this new Market Index it will raise awareness and add greater emphasis on school choice policy and its role in creating and sustaining a competitive education industry.

Research shows that “education markets are a superior way to meet the public’s educational goals, in terms of both individual needs and broader social effects…. Market schools are more efficient, academically effective, well-maintained and responsive to the demands of families,” said Andrew Colson, Director of the Center for Educational Freedom at the Cato Institute. When parents are able to pick their school of choice and are providing a majority of the funding, this can help reduce the cultural conflicts that arise over government-run, government-funded schooling. “The less people are pressured to patronize or pay for schools they disapprove of, the less social tension is created,” Colson said.

Educational markets work best when educators have the freedom and incentives to serve families and families have the freedom and incentives to be diligent consumers. One set of freedoms and incentives cannot exist by itself, or there will be no market. For example, “A system in which children are automatically assigned to schools by the state. Regardless of how free the schools themselves happen to be, there is no market under that scenario, because families cannot choose the schools they deem best, and schools have no incentive to ascertain and satisfy family’s needs. Similarly, if families are completely free to choose any school they want, but all schools are compelled to be absolutely uniform, consumer choice is rendered meaningless and no market exists,” Colson pointed out.

Wendy Cook is a staff writer at Accuracy in Academia.