With the riots in France (now spreading to other parts of Paris and other cities) starting to look like a kind of widespread uprising, I think it is worth while to open a discussion of market forces and market approaches to policy in general. There are those who argue that markets are always bad, always regressive. There are those who argue that markets are always good. However, I believe that both arguments are based on a poor understanding of what the market is and how individuals and public policy interact with it. My intention (if I can maintain the attention span) is to present a series of posts on this blog that outline my own view of how public policy can be used (and can't be used) in conjunction with market forces to improve people's lives.
I'll start by examining a popular right wing policy based on market forces: school choice/vouchers. Many right wing politicians see this a cure all for the problems of public schools. Their presentation and sales pitch on this idea has been so effective that many people who would normally be on the left, now agree with this right wing proposal. I argue that it is based on a misunderstanding of how people interact with education and the market.
The idea behind school vouchers and school choice policies is that parents would be given money to pay for private schools and/or given the choice to enroll their children in any school they wish. The idea is that parents would take their kids out of the bad schools and put them in the good schools. This would reduce the funding to the bad schools and impose market pressures on the bad schools to improve or close down.
This is based on some critical but rarely discussed assumptions:
1) Parents see schools located in different areas as equally (or nearly equally) desirable if their quality is equal. That is, parents would be willing to move their kids from school to school to gain improvements in quality. This assumption is probably false. Parents have repeatedly expressed their desire (often through violent protest) to keep their children in neighborhood schools rather than bus them out of the area. This desire is not only expressed by middle class whites opposing integration. Neighborhood cohesion is important to many immigrant communities and parents see local schools as an important part of that community cohesion. If the mobility assumption is false the market forces that advocates hope will force bad schools to improve or die will never materialize. And the only effect will be to give public money to those parents most desirous to send their children to private schools. That group of parents is likely to be disproportionately conservative Christians (which explains why the Republican party is so enthusiastic about this plan).
2) The reason bad schools are bad is because of poor management. If the problem with underperforming schools is largely due to poor management, then a market based approach could be a great mechanism for replacing bad managers with good ones (ignoring for the moment my criticism of assumption 1). However, if underperforming schools aren't working because of poor funding and social problems in the students' lives outside the control of the schools' administrators, then the market pressures on the schools will only serve to take away funding from already underfunded schools. At the same time as those schools die off, their students will move to better performing schools but they will take their social problems with them when they move. The result will be a constantly shifting population of "problem students" who will seem to ruin school after school until the underlying social problems are addressed.
Anyone else want to chime in?