Should public schools be privatised? Day 6

[Introduction] [Day 1] [Day 2] [Day 3] [Day 4] [Day 5] [Day 6]

Comments are now open. 

Dear A.N.,

What a brutal final paragraph! So if I don’t support your plan, I guess that makes me a conservative who doesn’t care about teacher quality. Few arrows could have better found their target.

I’m pleased that you and I have found common ground on civics, at least. I began by claiming that public schools provided a common crucible. You said that public school civics was in crisis. But since neither of us could provide empirical evidence, we weren’t willing to stand fiercely by our claims (incidentally, I think this is why people like John Quiggin and I enjoy arguing with you so much more than we enjoy arguing with many people on the right of the political spectrum). Perhaps one day, policymakers will have some believable causal estimates of the impact of school type on some set of ‘good’ civic indicators. In the absence of that, only the firebrands will be able to stay passionate about that one.

So now we’re left with the more traditional economic arguments. You take the view that privatised public schools will be more efficient and more equitable. I think the opposite is true on both counts. Whether it’s for political or economic reasons, companies like Edison Schools that have set up to run large numbers of schools have done very badly. According to their Wikipedia entry, their costs are higher than the public system, and they have still failed to make a profit in all except one quarter of their decade-long existence. A result like this makes me concerned about the viability of such a model in Australia. If private schools have one-third of the market when they get 55% of the government funding, can we really be confident that they could make a viable go of it in the rest of the market with 100% of the government funding? Shocking as it may sound coming from an economist, I think there may be some things that governments do better than markets, and one of them is running schools.

On the equity argument, I don’t think that the high use of a public service by the rich automatically suggests we should privatise it. My guess is that roads are used more by the rich than the poor, but I think the government has a core function in roadbuilding. National defence and policing are also of more benefit to the rich, since they have more to lose from civil unrest. But that doesn’t make me think that privatising them would help the poor. The good burghers of Rose Bay would find it much easier to set up their own private police force than those in Rooty Hill.

Related to the equity argument is the question of peer effects. You say that “Unlike the public school lobby, I don’t think kids should be conscripted into providing peer effects for their classmates.” Unlike either of you, I think the answer depends on whether peer effects are nonlinear. If the benefit that high-ability kids bring to low-ability kids is much larger than the cost that low-ability kids impose on high-ability kids, then perhaps we would want to dragoon high-ability kids into underperforming schools. (I’m reminded here of a comment that my thesis supervisor Christopher Jencks once made about neighbourhood effects: ‘it’s odd that policymakers spend a lot of time thinking about how to subsidise poor people to live in middle-income suburbs, when it might be cheaper to pay a few rich people to live in poor suburbs’.)

But I still haven’t removed your most wounding barb – that my nihilistic position leaves me as a conservative who doesn’t care about teacher quality. And I guess that here I can only fall back on my faith that governments eventually do the right thing. It took most of the twentieth century before the progressive side of Australian politics finally realised that surrounding ourselves with high tariff walls hurt the poor more than it helped them. Part of the challenge was that organised labour represented producer interests, while consumer interests were disparate and disorganised. It took a succession of tariff board reports, industry restructuring plans, and a lot of talking before a Labor government finally took action. When it comes to education policy, I think the same is true today. The voices of teachers are much more forceful than those that advocate for children’s interests. Sometimes, what’s good for teachers is good for kids. But not always.

You’re right that those looking for bold ideas on teacher quality have not exactly been deluged by innovative proposals in this campaign. Nonetheless, to simply sell off all schools would effectively give up on education policymakers. By contrast, I’m still optimistic enough to believe that just as economists’ ideas prevailed in the domain of trade policy, the same can happen in education policy. As Keynes famously wrote, “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.”

Thanks for the discussion. It’s been a pleasure.

Yours, idealistically,


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20 Responses to Should public schools be privatised? Day 6

  1. Pingback: Andrew Leigh » Blog Archive » Should public schools be privatised? Day 5

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  4. Kevin Cox says:

    I think that ideally both agree that all children should have equal opportunity to education which means as near as possible that the resources devoted to the education of all children with the same background should be about the same. This means that all money spent within the formal school environment and is available to any school pupil should be as near as possible to being the same for children with the same abilities and background. As a society it is only fair that children should get the same opportunity and the lottery of birth should be reduced as much as possible.

    Being economists I assume you both believe in markets as being efficient allocators of resources. Fundamentally you probably believe this is because it allows choice of the people who are going to consume the resources and it allows suppliers of resources to innovate and come up with better solutions. Education like all infrastructure is different from breakfast cereals and markets are harder to establish but what we want is for suppliers to do more with less. Normally we do this through using money as a way of consumers expressing choice.

    Let us think first of choice. However we are going to do it we are going to try to get about the same amount of money spent on each child. Money under that concept cannot be used as the mechanism for expressing choice so we have to think of another way to express choice. We can first set a rule that any school that receives government funding must be open to any child from any part of Australia. This allows any parent to exercise their right of choice.

    The problem has now been reversed to schools expressing their choice on which children to accept. This is an interesting problem and in some ways a better one because schools have more information about children. Some ideas might be as follows: If the school has boarding facilities then children who are in remote areas get first priority and these children get higher funding amounts because of their remoteness. Given that we can give these children more money there is no reason why other children from deprived backgrounds might not bring in more money. For example a child that has been expelled from one school might bring in more money. A child who has low reading ability might bring more money. If their reading ability remains low then they do not get more money but only while their reading continues to improve will they continue to attract more money. All other things being equal a school might use geography as a criteria for selection. Siblings in the school, a community connection (their parents went to the same school), the child was in the school in the previous year could all be used as part of the criteria.

    We will have some parents who are not satisfied by the amount of money being spent by the school. They can still pay money to the school but it cannot be used in the criteria for whether a school continues to accept the child and it cannot be compulsory.

    The schools get money from the government depending on the child. Schools also get extra funds depending on the rate of learning of the children in the previous year.

    However, let us think of the problem as one of the schools choosing the children rather than the parents choosing the children. That is the consumers are now the schools and the parents are the suppliers of the children. We have a reverse market! It now does not matter whether the schools are private or public and the argument goes away.

  5. Kevin Cox says:

    Sorry it should be parents choosing schools:) not parents choosing children.

  6. I think both you and AN have got it wrong on civics engagement. I’m not talking about involvement in the local soccer club or scouts group.

    There’s an ignorance about the level of involvement of young people in democracy. One indicator is the participation of young people in enrolling to vote and elections. It’s been reported that in 2004 in NSW only 70% of young adults were even enrolled to vote and across Australia it stood at 85%. Then there is the more active engagement of young people in the political process, not just as it now stands, but to improve it.

    There is a denial across the political spectrum that democracy is nothing more than a subject that gets taught and swamped in a myriad of other subjects at School. I’m coming to the conclusion that this attitude is more a matter of protecting elites from the masses who might become too knowledgeable and actually think deeply about democratic values and rights. Democracy and democratic values need to be understood through their practice every day. The denial of the rights of young people to democracy in schools, only perpetuates beliefs that there are people in authority who must be obeyed rather than debated, questioned and challenged. The last election demonstrated how willingly ideas lacking content or substance were put forward and accepted, and not challenged.

    Young people ought to participate in school democracies from the youngest ages. Then they will know their input, voice and a vote can have an affect on the world around them. For the most part there is nothing more than a vague notion of what young people need or think or might say, decided remotely away from them in a central office.

    I’m disappointed at your easy dismissal of the effects of poor education or teaching. It’s lazy bureaucratic nonsense to so easily say, oh well, the teaching profession or government may change or may eventually get things right one day when it eventually gets around to it. It lacks a sense of immediacy in the effects on any single individual student, today, who has to suffer while others remote from them work out, again and again, how young people learn, that they’re individuals, and not classes, and not categories, with individual needs and aspirations. Today is the best day for change to occur, not in years’ time, when too many young people have lost time and been wasted in order for others to change.

    Young people have needs and rights. It’s about time they were recognised above and beyond the rights of capital and teachers. Students ought to be central to schools and education. Democracy is for young people too!

  7. Guy says:

    Thanks guys. An interesting and worthwhile experiment.

  8. Matt C says:

    Thanks for a great series of posts. I hope this isn’t a one-off format.

    Something I was slightly confused about was an element of Mr Norton’s argument. Norton initially argues that ‘state-controlled education’ is undesirable, as it allows governments to dictate a monolithic curriculum. He compares it to a situation in which all media was state-run, with citizens “examined to make sure they had absorbed the official line”.He then notes that 120 years of ‘free and compulsory’ education has not yielded “much political knowledge”.

    Which is it? Is the state-controlled education sector inculcating our young with political values, or is it not? AN cannot argue both.

  9. Very imformative gentlemen.

    Particularly so because you are both good-faith debaters.


    I opposed the privatisation of schools before this discussion and I think Andrew L. defended the position well. I see no need to change my opinion.

  10. Graham says:

    Thanks for the interesting discussion guys.

    I agree with both of you that markets are generally best at handling services, but I don’t think the debate over education should be one of economics; but equality and liberty.

    Education is opportunity. If we wish to have a society that holds equality and liberty as ideals – that rewards and recognises individuals based on their choices – then every individual should be allowed the opportunity to succeed based on merit, not on socio-economic background.

    Why should children be punished or advantaged based on the choices of their parents? Aren’t all individuals entitled to success based on their own choices and performance? Do we attach criminal records to children whose parents have committed a crime? No. As autonomous beings they are afforded the opportunity to be assessed based on their performance, not the success/mistakes of their parents.

    Education is society’s great (and perhaps only) equaliser. At its core it should be the foundation that ensures equality while maintaining individual liberty. A tiered system undermines both equality and individual liberty because it punishes and rewards based on the choices of parents, not of children as individuals.

  11. Chris Lloyd says:

    I do not understand the economic arguments for funding elite private schools. One argument is to compensate parents who have saved the state money. A second argument seems to be supply side – to encourage more/better teachers/schools.

    The problem is that top-end private schools are, by their nature, elite and limited. That is part of their value proposition. My kids go to an elite school whose total places has hardly increased for decades. This is the case for most elite schools (Wesley excepted). If there is no room to increase supply, then the school fees are determined by supply (fixed) and demand (increasing) and the $5000 per student has no effect on fees, yes? It just goes into the building fund for future students. So both arguments for government funding seem to fall over.

    Now if the funding were only for extra places over and above current enrolments then it would be a different matter.

  12. ChrisPer says:

    Interesting arguments – most especially the savage slander that you are conservative. This for a person who praised the NYT as perhaps the world’s best newspaper (a conservative would label the NYT a den of treason), and mostly fails to frame issues into moralising goodies-vs-baddies storylines.

    You are right to be insulted Andrew L!

  13. Matt C – I don’t think there is any contradiction. People forget most of what they learn at school, and in some schools they don’t learn very much to begin with. And in the case of civics, it has only patchily been taught at all from what I have been able to find out about its history.

    I don’t believe that indoctrination is the main problem with schools (though it is a problem); I started with that point because I was hoping to get people back to first principles. The same people who call for media diversity usually oppose it in education. The same people who call for multiculturalism oppose it when people with different cultures want to pass it on through schools.

    I think a public education system is a bit like the monarchy – you would never create one these days if you did not have it already, but it has become part of the institutional furniture, even though the reasons it was established in the first place no longer apply.

  14. Peter Whiteford says:

    Thanks to all.

    A few disjointed reactions.

    At the outset let me say that my parents sent me to a private school, but that was because of catholicism rather than anything else, but we started off sending our kids to public schools, until we moved to a country where English wasn’t the language of instruction.

    My reaction to Andrew N’s first post may seem casual, but it is where is the evidence that Australian public schooling is the sort of disaster that you seem to imply that it is. Are Australian intellectual elites all drawn from private school backgrounds? Does everyone who went to a public school get an inferior education? Does everyone who went to a private school get a superior education? What is the variation in educational achievement by type of school attended, and what other factors apart from type of school have influenced these outcomes? Evidence please.

    Sure lots of people say that public education is in crisis, but whom are we talking about – public education supporters who want higher spending, public education opponents who want privatisation, and newspapers and commentators who want dramatic stories. Everyone who says there is a crisis has a vested interest of one sort or another in there being a crisis (but with different causes and different policy responses).

    Meanwhile despite an education system in crisis for the past 30 years, Australia has been getting richer and more productive and we still come out towards the top of PISA rankings.

    Perhaps most importantly, would we be better-off as a nation if the public school system had never existed, but it had always been private parental choice funded by vouchers?

    This last question is of course unanswerable, but in a sense Andrew N’s last observation above – ” I think a public education system is a bit like the monarchy – you would never create one these days if you did not have it already, but it has become part of the institutional furniture, even though the reasons it was established in the first place no longer apply” also assumes a counterfactual that is impossible to prove.

    I would have thought that the main reason why the reasons for having a public education system no longer apply is that because we have had a public education system for the last 170 years (or whatever). That is, Australian institutions – amongst which is the public education system and government set curricula and public examinations – has produced a literate, numerate and productive population who also on the whole get along with each other and share common values.

    Australia is of course relatively unusual in having a relatively high share of students in private schools, and perhaps that is why the system has been successful. But presumably the main reason for the high share of private students is the historical experience of having a large Irish catholic minority.

    Now about indoctrination. I’m all for choice actually, but i think that we also want core competencies that develop over time. If this is indoctrination then that is a good thing.

    Andrew N also says above: “People forget most of what they learn at school, and in some schools they don’t learn very much to begin with.”

    Well actually I learned to read and write and count at school, and I haven’t forgotten this (yet).

  15. Chris Lloyd says:

    In fact, let me put it even more clearly. If the government stopped giving money to Scotch and Kings and the other elite schools tomorrow, do you reckon they would close down, or even reduce size? Surely not. They have waiting lists as long as a public hospital. So the money is utterly wasted from the budgetary point of view. It is manifestly NOT saving the public purse anything.

    I was also arguing above that the $5000 is not even passed onto parents but is added to the capital of the schools for future generations of advantaged Eastern suburb students (like my kids).

  16. Chris – No, of course Scotch and Kings would not close. They survived the best part of a century without state aid, in a much less wealthy society than we have today. But if you have a system in which parents are universally entitled to some school subsidy, elite schools will receive money they could in fact do without. And so long as we have the dual system Andrew L wants, we will have anomalies. Under your system, a wealthy family could send their kid to a selective high school and effectively receive subsidy of $11,000 a year or thereabouts. Or send them to Kings and get a subsidy of $0. Whichever way you go, there are clear anomalies.

  17. Pingback: Andrew Leigh » Blog Archive » Should public schools be privatised? (Full discussion in one thread)

  18. A response to Peter Whiteford here.

  19. Sinclair Davidson says:

    governments use public education as a means of indoctrinating their citizenry.

    In South Africa we had something called “National Christian Education” (I have been trying to find a link, with no luck) that provided this service. It went beyond just civics and attempted to produce good National Party voting citizens. So while I’m happy to admit that this indoctrination program failed (in my case at least) I’m also very opposed to the use of education to ‘indoctrinate’ the population.

  20. Alphonse says:

    Perhaps AN can explain how multiculturalism’s greatest sceptics largely overlap with private education’s most enthusiastic proponents.

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