Wednesday, March 2, 2011

Mac & Ed

Several weeks ago in the pages of a regional newspaper in my area, Marsha Michaelis of the Evergreen Freedom Foundation, compared education to macaroni and cheese, arguing that in the same way we're accustomed to 28 varieties of that food product, we really deserve to have a similar market competition in education. This facile analogy serves as a rhetorical sleight of hand which is intended to make us think that market forces are the solution to the problems that are supposed to beset the schools. But the producing, selling and buying of macaroni and cheese is not much like provision of education service. Ms. Michaelis' own market sensibility should reveal this to her. Let me explain.

The dozens of macaroni options available in the store are largely interchangeable. They are packaged, sized, designed, and colored similarly, and they come in a few basic types--traditional boil and mix, microwavable tubs, and 'fun-shaped' novelty noodles. Most importantly, they taste about the same (except for the one 3-cheese variety and the two whole wheat options). So, though there are 28 varieties, they are fundamentally similar. In fact, most of the variation is for marketing purposes. The Scooby Doo variety is only different from Sponge Bob in that it broadens the prospect of catching more children's attention. The two otherwise look, smell and taste the same.

Unless a macaroni consumer is looking for the novelty of something like PowerPuff Girl noodles, or has brand loyalty, most macaroni purchasers are price sensitive. This means that when one similar (almost interchangeable) option is priced lower than the others, many consumers will purchase that one. Consumers can--and sometimes do--even switch brands for price (or novelty) purposes.

This, then, begins to explain how macaroni are not like schools. Macaroni are purchased and consumed. This discrete process may be repeated, but each purchase is fundamentally independent of other macaroni purchases. Further, macaroni are not sentient beings with parents who want particular outcomes from the continuous (not discrete) production process. To put it another way, macaroni purchases are of much lower consequence than educational processes. To wit, switching schools--even in an environment of high school choice--could never be anywhere as easy as an 89-cent macaroni purchase.

Perhaps this inflexibility of movement reflects the lack of options in school choice. But then again, perhaps it reflects the economies of scale problem. Achieving economies of scale means maximizing on the efficiency that comes from production in larger volumes. This side of the economic analysis is often left off by the competition advocates because it takes more account of the reality that a capital and labor intensive activity like education (yes, it really is both) becomes more efficient when done on a larger scale. Lots of variety in schools (and therefore small schools) means smaller scale and reduced efficiency. In other words, two different strains of economic logic actually work at cross purposes in this case. It would be great to have innumerable different types of schools--and it would be cost-ineffective. We can't have it both ways--wide variety and low price.

This fact points to the other conceptual difficulty in broadly applying 'market logic' to education production. Namely, we lack a good metric for 'efficiency.' Economists let prices do a great deal of both the practical communicating and theoretical measuring in their ideas and prescriptions, but pricing education production is made difficult because 'test score outcomes' are not easily monetized, so the correlation between test scores and profit (the monetary measure reflecting gains in efficiency) is merely arbitrary.

This is not to say that the idea of greater competition and wider variety wouldn't be a good thing. It may, but achieving the benefits of competition will be much more complicated, and take more creativity and thought than buying macaroni.

1 comment:

Anonymous said...

Nicely put, Andrew. I'm going to be reading other postings from this blog over the next few days and I've bookmarked it so I can follow it more easily.