ARTICLE

Peanut Butter, Education, and Markets

Who Should Provide Education, and How Should It Be Financed?

NOVEMBER 01, 2000 by DARCY ANN OLSEN

Darcy Olsen is director of education and child policy at the Cato Institute.

Have you ever thought of petitioning Congress about the quality or quantity of the peanut butter you eat? Have you ever thought of creating a reform movement around peanut butter? Or have you ever wondered why there isn’t a federal department of peanut butter? Maybe it’s because if customers don’t like Peter Pan, they can buy Jif, and if they don’t like Jif, there’s Skippy. We can get it chunky or smooth. We can even get low-fat peanut butter, of all things.

Why are there so many variations on a product that in the scheme of life is pretty insignificant, but when it comes to education—a product that determines our children’s future incomes and the very character of our society—America still relies on a Soviet-style monopoly that provides almost no choice, variation, or freedom?

Student achievement has been stagnant or falling in almost every subject for the past 30 years, as measured by several tests, including the National Assessment of Educational Progress, the International Evaluation of Education Achievement, the Young Adult Survey, the National Adult Literacy Survey, and the International Adult Literacy Survey. And it’s not because we don’t spend enough. Over the same 30-year period, real spending has doubled, increasing from $4,000 to $8,000 per child.

Why? One reason is that K-12 education in America is a legally protected monopoly—it’s protected from competition by its guaranteed tax base, and it’s bereft of the profit motive that spurs innovation and efficiency in every other successful industry in the country. America desperately needs an education system where the customer is king. And when the customer is not treated as a king, he should be able to take his business elsewhere. Let’s call this customer-driven education.

Naturally not everyone shares that vision. Vice President Al Gore’s biggest-ticket education item is federal preschool for all 3- and 4-year-olds. Lost on Gore is the fact that 70 percent of preschool-aged children already attend preschool, and, call it old-fashioned, but some parents still prefer to care for their preschoolers at home. This flexible approach to early education arguably is the best part of the American education system. According to the Department of Education, U.S. preschoolers have a strong start. On factors that kindergarten teachers say are among the most important for school readiness—physical health, enthusiasm, and curiosity—today’s kindergartners are in top shape. As they enter kindergarten, more than 95 percent are in good health; nine out often are eager to learn; and about 85 percent work and play creatively. In terms of concrete knowledge, 94 percent are proficient at recognizing numbers and shapes and counting to ten. Two in three know their ABCs.

It’s also in the early years when American students are most competitive internationally. Consider France, England, Denmark, Spain, and Belgium—any number of European countries with universal preschools—where more than 90 percent of 4-year-olds attend public preschools. International tests show that by age 9, when the benefits of preschool should be most apparent, American children outscore nearly all their universally pre-schooled peers on tests of reading, math, and science. The little known truth is that America’s free-market approach to preschool education is working.

While politicians like Gore may not be clamoring for educational freedom, parents are. The homeschooling universe is now roughly the size of Los Angeles and Chicago city school systems combined, and growing. Since just 1990, 36 states have passed charter-school laws and already there are more than 1,700 charter schools. Wisconsin, Ohio, and Florida have adopted voucher programs. Minnesota, Illinois, Iowa, and Arizona have tuition tax credits. And half the states have considered vouchers and tax breaks in just the past year.

Those plans are a long way from a pure, customer-driven education system—but what this demonstrates is a tremendous shift in attitude about who should provide education and how it should be financed. For a long time, the teachers’ unions dictated education policy. The problem was money: the solution was money. The only point of contention was how much. Today, there is tremendous skepticism about the notion that more money can buy progress, and there is a growing demand for more parental authority and less government control.

Online University

A few months ago, Michael Saylor, a high-tech billionaire, put up $100 million to start an online Ivy League university free to students. Imagine an Ivy League-quality education freely available to any student in the world. That’s just one entrepreneur’s dream. Now imagine the response of hundreds of thousands of entrepreneurs when families of 55 million students go shopping for an education. In a competitive environment who knows where the schools will come from? IBM, Disney, National Geographic, education entrepreneurs, or universities. Maybe we’ll be learning everything we need to know from something the size of a Palm Pilot.

Some people might say this is too radical. But the Wright Brothers weren’t looking to make a faster steamship: radical may be just what we need. As David Boaz of the Cato Institute wrote, “Without that market, we’ll be putting 20th century computers in 19th century schools and congratulating ourselves on preparing children for the 21st century.” The monopoly is loosening, and the time has come to replace it with a customer-driven education system characterized by competition, innovation, diversity, and excellence. Soon, our choosy mothers will finally have a choice, not only in peanut butter, but somewhat more important, their children’s education.