Death and life

Diane Ravitch has written a book about her retreat from supporting school choice, accountability, and other “market-based” reforms such as vouchers and charter schools. She supported these reforms not from any strong philosophical perspective, but simply from a pragmatic one: she thought they would work. Now, after something like 30 years of observation, Ravitch concludes that these reforms have not worked and she’s taking it all back. It may not come as a surprise to hear that I have a problem with all this. A few problems, actually.

Problem 1: What do you mean by “work”?
Ravitch considers trends in educational achievement to conclude that the reforms mentioned above have not worked. She’s right in one sense, that student achievement is stubbornly uncorrelated with just about anything we can control – at least anything we can control by throwing money at it. So it’s hard to tease out any significant improvement in outcomes for students in charter schools or private schools or who use vouchers, who are bused, who attend a community school, who have a small class, who get free lunch, who wear uniforms, whose parents are vegans, who have a pony, or anything else. (Note: this of course assumes you control for the very stubborn demographic characteristic that the schools do not influence: socio-economic status.) No matter what you do, kids turn out about the same. So Ravitch concludes that the reforms have failed. But is that the whole story?

There are at least three reasons to look at, say, charter schools and suspect they’ve been successful. First, skimming. Charter schools tend to attract disproportionate numbers of students from “good” families, where the parents are interested enough to help their kids get into the school and do the extra work. In some cases they even pay extra. This suggests that charter school students are likely to be better students than the ones left in the public school. This is one of the main arguments against charters: they leave the worst students in an even worse environment than they would have been in otherwise. But I disagree, I see this as a benefit: it gets the best students out of a bad environment and puts them in a better one.

Second, revealed preference. Charter schools are chosen by the students and parents who attend them. In fact, there are many more applicants than spaces. This suggests that the consumers of charter schools see benefits – whether they manifest themselves in standardized tests or not.

Third, benefit/cost ratio. Charter schools spend less per student than public schools do. The difference ranges from small to very significant. If the benefit of an investment stays the same (i.e., student achievement is unchanged) but the cost decreases, then the investment just got better.

Problem 2: Who cares about public schools per se?
A big problem for Ravitch seems to be the effect charters and vouchers might have on the public school systems. She goes so far as to say that one of her hopes was that competition would improve the public schools. In fact, this was one of the possible benefits noted by Milton Friedman in the 1960s when he laid out one an early case for vouchers. Well, Ravitch hasn’t seen it. In fact, she’s concerned that “skimming” means the public schools are actually worse off. However, education does not exist for schools, teachers, or bureaucrats. Education is for students and it’s paid for by parents and taxpayers. Those are the stakeholders. Any negative effects (assuming there are some) on public schools are irrelevant. Totally irrelevant.

Problem 3: “Incentives” are not the same as “markets.”
People who don’t operate in the real world – bureaucrats, teachers, politicians, etc. – are sometimes confused about how markets work. They talk about “creating” markets as if it’s possible. But it isn’t possible. A set of government-created incentives is not the same as an emergent, consumer-driven market. In fact, the law of unintended consequences suggests that attempts to create a market and control it by fine tuning the incentives are dangerous. The textbook example is the “deregulation” of the energy market in California. The hubris of those who thought they could mimic a free market by creating just the right incentives is pretty staggering, and it led to a real disaster for Californians. In fact, the current financial crisis is another excellent example. (Fortunately we’ll soon have another round of regulatory tinkering to ensure nothing like this ever happens again.) No less so for education.

Problem 4: You can’t beat something with nothing.
Ravitch concludes that vouchers, charters, and accountability don’t work. But she doesn’t really have any better ideas. Is non-accountability better? What about non-choice? It’s hard to see how moving away from these ideas can possibly improve education – by any standard.

How about this?
One reform she doesn’t consider is simply less. Less money spent on education, less federal involvement, less State involvement. It seems obvious to me that the problem with education is not that too little is spent or that too little attention is paid. We should instead focus on maximizing the return on investment, and at the same time free up local educators to optimize and innovate. Is this fair? No. But it will be better.

Maybe education is good enough already

When it comes to improving schools, the only metric that's ever discussed is getting more out of them. We talk about improving test scores, we talk about increasing graduation rates, and we talk about sending more kids to college. However, the true measure of how good schools are is not what we get out them but how much we get out of them compared with what we put into them. Benefit/cost ratio. Net benefit. Whatever.

The Law of Diminishing returns, one of the few universally recognized laws in economics, says that the amount of a good you can produce decreases as you increase the inputs. The first acre of farmland will be the one with the most fertile soil, close to the railway or river for shipping, in the spot with the best climate. The two-billionth acre will be in Arizona, requiring irrigation and producing barely enough to justify using it at all. Education is like that, too.

The first dollar we spend educating a student teaches him to read. That's pretty important. The fifteen-thousandth dollar lets him watch Molly Ringwald movies in forth period health class. I submit that the last dollar is not as valuable as the first. In fact, I suggest that the last dollar spent does not provide even one dollar's worth of benefit. It is wasted, and would be better not spent on education at all.

What's the point? Well, when we evaluate schools, we should consider not only the gains the students make, but the gains they make per dollar spent. Maybe the best way to improve schools is to cut funding.

Pleading poverty on Montlake

This article in the Seattle Times is about the hard financial times at the University of Washington, the state's flagship university. At this point I'll take a quick aside to point out that despite the university's woes, things are really looking up for the football team.

Anyway, the article is all about how there isn't as much state money as there used to be, so the UW is scrimping and saving to make ends meet. Frankly, I don't see what the problem is, but then I don't quite understand why higher education is publicly funded. I'm dense that way, I think. The externality argument gets more and more tenuous the farther you get from basic skills. By the time you get to college, you're talking about a transaction where the vast majority of the costs and benefits are borne by the parties - the student and the school. I see no need for the state at all.

Having a little trouble staying on track, here.

The article states that the UW is implementing an "activity-based budget system," which will allow them to earmark a student's tuition for the courses he takes, and identify which courses cost more than the revenue they bring. Bravo! The only thing lacking is a strong signal that the courses whose revenue is below their cost will be cut. Or the professors could agree to be paid less, that would be fine, too.

This reminds me of an old joke. The president of a university comes to the dean of the physics department and says, "We're having budget trouble, and your school is one of the most expensive, with all the lab equipment and so forth. Why can't you be more like the math department? All they ask for is pencils, paper, and wastepaper baskets. Or the philosophy department? All they ask for is pencils and paper."

By the way, you'll note that the positive externality argument goes in reverse order of cost in that joke. It's possible that you can argue that there's some societal benefit to another physics major. A math major might be break-even. But we'd be better off with fewer philosophy majors (along with communications, psychology, sociology, education, and of course American Ethnic Studies).

They also mention differential tuition, where students who want to take expensive courses can just pay more. This used to be called "lab fees." Again, I think this is a great idea. When some whip-smart 18-year-old sets out to go to college, he should consider all the costs and benefits of that decision at every step. There's no reason the rest of us should take some of those costs off the table. Why? Ana Marie Cauce, dean of the College of Arts and Sciences says, "You don't want a student deciding to be a psychology major instead of doing mechanical engineering just because psychology costs less." Why the hell not? This is why academics have such a bad reputation out in the real world. In real life, you have to consider the costs of every decision you make. Academics never do. The costs of every (professional) thing they do are picked up by taxpayers, students, donors, or various others. From my perspective, it would be a very good thing if students thought about the full cost of their college education when making a decision to go. They should consider their lost earnings. They should consider the cost of tuition. They should compare this with the possibility of earning more in the future and decide.

This is the part where somebody says, "Wait! What about the poor, who can't afford to go to college?" I have two replies to this. First, I think it's largely a red-herring. I don't think there are too many students who can get into college but can't afford to go to a state school one way or another. However, since I'm advocating drastically increasing the cost of college, I have to do better than that. The answer is that college education could easily be funded by corporations. If a student can't afford school, he could ask Boeing to pay for part of his college in exchange for agreeing to work for Boeing for some period of time. This model is currently being used by one of our largest companies: the United States Military. The benefit is that all the costs and all the benefits are captured by those who are party to the decision of whether to attend college and what to study. This is how you get economic efficiency.

It would work. It would work great. We just have to get over our misty-eyed sentimentality about education and treat it like any other good. In fact, the UW knows it would work, too, although they're not saying it. Why else would they be admitting more out-of-state students? Maybe we could arrange a trade: We'll send all the Washington college students to Oregon and Idaho, and they'll send theirs here. Everybody will pay out-of-state tuition, and the universities will be self-financing.

Finally, this property downtown. How can it simultaneously be a) worth $500 million and b) producing a return of $8 million? That return is about one third what it ought to be. The UW could triple its money by selling the property and investing the proceeds in the stock market.

Math is hard! *

Here is a YouTube video posted by M.J. McDermott, a weather girl in Seattle who went back to college to get a degree in atmospheric sciences. She soon discovered that her old-school arithmetic was a lot better than her fresh-out-of-high-school classmates'. She talks about college students who can't calculate 4x6 without a calculator.

I'm going to ignore the selection problems -- that she's a highly motivated, adult student, and that her classes were almost certainly diluted by a bunch of people who had no business attending college at all. (I'm also going to ignore that she's talking about arithmetic, not mathematics.) Instead, I'm going to focus on her diagnosis: that the way math is taught is a failure.

To make her point, she pages through a few junior high math books, highlighting the fact that there's not much math in them. There's a lot of multi-cultural diverso-nonsense, of course. Never hurts to saddle up that hobby horse for a quick gallop. But when it comes to actual calculations, the curricula McDermott shows seem to mostly wave their hands and leave it up to the student to get the basic idea.

For many students, this is undoubtedly a terrible way to learn to do multiplication or long division. They need a reliable algorithm they can memorize and that will work every time. One example she shows is a book that suggest multiplying by breaking the numbers into clusters, so 26x31 becomes (20x31)+(5x31)+(1x31). If you would have struggled with the traditional approach to multiplication, I'm sure cluster problems are simply more than you can handle. They're abstract, they're subjective, and they require more thinking. However, speaking as somebody who works in a very math-intensive industry, I can tell you that this is exactly how people who are good at math think about the problem. Furthermore, it's unlikely that you'll never actually need to multiply 31 and 26 without a calculator. I can see the new-math-people's point: Why are we wasting everybody's time teaching a method that has pretty much no application?

That statement was hard for me to make, because it's so obvious that as a first approximation all the changes in curriculum for the last forty years have had one of two goals in mind:
a) to indoctrinate students to a certain point of view (e.g., history becomes social studies,

or (mostly) b) to make life easier for teachers (e.g., Shakespeare is expunged, phonics is given the hook). But like I said, I can kind of see the point in this case.

Nobody needs multiplication algorithms. If you're doing math in your head, its good enough to know that 26x31 is about 800 (26 is about 25, which is one quarter of 100. 31 is almost 32, which divided by 4 is 8. 8x100=800.). If that's not close enough, you really should use a calculator. Actually, nobody who's doing math uses a calculator anymore either. You should plug the numbers into Excel.

Once again, it depends what you think the point of school is.

If you think school is about getting everybody up to a certain minimum level, then you better stick with the tried-and-true algorithms. They work, and pretty much anybody can learn them. On the other hand, if you think school is about educating people according to their abilities, so the smart kids do one thing, the average kids do something else, and the dull kids do something else again, then the answer is different.

* Misquote from Teen Talk Barbie. She actually said, "Math class is tough!" No less true.

Public employee pensions

See here for the shell game going on in Olympia, capital of Washington State, about public employee pensions. The double-talk from these state representatives is so disingenuous I wonder how they can keep a straight face. But that's to be expected. What I want to talk about is the stipulation that we must never, never, ever under any circumstances consider modifying pension benefits. Why not?

Well, the argument goes -- you can read it right in the article -- we made a promise to all those public employees, and we wouldn't want to go back on it. The truth, of course, is that "we" didn't promise anything. Those same politicians who can't be trusted to tell the truth about the status of the pensions promised some public employees' unions that they'd make such and such payments. And the truth of that is that they didn't promise "they'd" make the payments, they promised that I would.

Now I get this basic social contract idea that the government speaks on behalf of all of us and we have a responsibility to blah, blah, blah. But look, my own, privately funded retirement account to a 40 percent hit over the last year. I wasn't planning on that. Life is tough, and sometimes it's unfair. I'm not quite ready to accept the idea that I, as a taxpayer, am responsible to make good on the unfairness that affects me as well as the unfairness that affects the public employee. No deal.

Let's not have any talk about putting retired teachers out on the street or cutting off medical care for diabetic retired bus drivers. I'm talking about marginal changes to benefits (especially future benefits) to reflect the reality of the world. Pension benefits are fair game.

Another perspective on failing schools

This article in the Wall Street Journal discusses a study of so-called failing schools in California. It measures the mobility of schools in terms of how likely bad schools are to become good.

Mr. Loveless looked at 1,100 schools in California and compared test scores from 1989 and 2009. "Of schools in the bottom quartile in 1989—the state's lowest performers—nearly two-thirds (63.4 percent) scored in the bottom quartile again in 2009," he writes. "The odds of a bottom quartile school's rising to the top quartile were about one in seventy (1.4 percent)." Of schools in the bottom 10% in 1989, only 3.5% reached the state average after 20 years.

Conversely, the best schools tended to remain that way. Sixty-three percent of the top performers in 1989 were still at the top in 2009, while only 2.4% had fallen to the bottom.

His conclusions were that, "School achievement, or lack thereof, is remarkably persistent," and he "the answer may lie in a school's culture—its education DNA."

I tend to be a believer in the group socialization theory of child development, so I'm sensitive to the idea that a school can have a culture that can't be changed by bringing a tougher principal or some more-concerned teachers. However, there's another question that needs to be answered before we start spending money closing bad schools and opening new ones: What if the schools are fine but the kids are failing?

In other words, part of the reason a school's culture doesn't change over a twenty-year period is that the students who attend over that period tend to be similar. I suspect they are particularly similar in terms of wealth and race, both of which are strong predictors of IQ, which is in turn a very strong predictor of school performance. If you think of it in those terms, then the idea that schools would not change much over time is unsurprising.

There can be no doubt that some schools are inherently better than others, but let's please ask some pertinent questions before we charge ahead; we better do a little more research. For example, those few schools that did move from the top to the bottom or vice versa, were there demographic changes in the regions they served? Did the neighborhood gentrify? Did a large company close its doors causing everybody but the poorest and least able to leave?

I'd also like to know whether the kids who leave failed schools after they're closed actually do any better than they did at the failed school. And please, don't talk to me about a some kid who left MLK High School after his freshman year to attend the Topsider Academy and raised his GPA from 0.7 to 2.5. We need to deal with the world as it actually is. These kids won't be plonked into a great environment all of a sudden. They're going to attend another school with DNA that's probably a lot like the one they just left. That's the reality. And I am not sure I see why we would expect this new school to be much different from the old, "failed" one.

A side note:
There's also a bit of a measurement problem here. No matter what we do, there will always be a range of school and student performance. That necessarily means that some schools and students will be worse than the rest. I.e., we cannot all be above average. Perhaps we should ask whether these worst-performing schools are actually good enough. I know that idea isn't popular in the ed biz, but surely there must be some point we'd be satisfied that no school is failing. How do we know we're not there already? I'd love to hear somebody at least address this question in a serious way, including thoughts about benefit/cost. We can always spend another dollar to improve schools, but the return on each additional dollar is diminishing. We're already spending so much; it must be legitimate to ask whether the next dollar we're proposing to spend provides at least a dollar of benefit.

Market failure: necessary but not sufficient

One justification for the heavy involvement of state and federal governments in education is market failure. Market failure is a micro-economic idea in which free exchange does not produce the theoretically optimal level of production and consumption. Usually this occurs because of an externality. An externality is a cost or benefit from an exchange that accrues to someone who is not a party to the exchange. Since the cost or benefit of this externality is not considered by the parties involved in the exchange, a free market might tend to under- or over-produce a particular good.

For example. I build a factory to make widgets. (All example economics problems involve widget manufacture. Did you know?) I produce widgets up to the point that the last widget I make is worth exactly as much to the purchaser as it cost me to me. For example, if widgets are worth $10 on the market, I'll make as many widgets as I can until the last, most expensive widget costs me ten dollars, and then I'll quit.

This is all well and good. I'm happy, my customers are happy. We're both benefiting from the surplus of trade. It's great! But what if there's an externality? Let's say my widget factory puts out a stream of noxious liquid that runs across my neighbor's yard. If that cost were borne by me, I'd have an incentive to make fewer widgets, since the cost of manufacture would be higher. If it were borne by my customers, they'd buy fewer widgets, since the cost of buying widgets would be higher. But since it's borne by a third party, not involved in the transaction, no one has any incentive to take the cost into account, and widgets are over-produced.

In the case of education, the externality is not a negative, it is a positive. The argument is that my education benefits others besides me. Those benefits are not taken into account when I decide how much education to buy or when the suppliers of education decide how much education to produce, so the market for education is smaller than it ought to be. Ideally.

This simple idea is the basis for billions of dollars of spending by governments on education. My own state of Washington has a constitutional clause stating that education is the state's highest priority. But is that right? Does that follow from the logic of externalities?

Let's remember that one of the options we are given is not perfection. We must compare options as they are actually available to us. Therefore, the "failed" free market for education does not have to compete with the idealized provision of education by the state, but rather by the provision of education by the state as it actually exists. Although it is possible that a free market in education would tend to under-supply, are we sure this is worse than the other alternatives? How do we know that the current system doesn't over-supply the education market? I have yet to hear anyone even raise this issue.

Education is important. But it's not infinitely important. Let's have some thought to return on investment in our spending decisions regarding education. Let's at least be sure that the benefits of the marginal dollar outweigh the costs.