“Markets Don’t Work in Education” Shockwave

A leading US education research economist caused shockwaves amongst the education research community last week by saying that markets don’t work in education. Dr. Margaret Raymond from Stanford University said that after decades of looking at charter schools in the US she has come to the conclusion that the “market mechanism just doesn’t work” in education.

So what, you might say, lots of researchers know this already and it has been said many times. But the shockwave came from who said it.

Dr. Raymond is the founding director of the Centre for Research on Education Outcomes, known as CREDO, which is part of the Hoover Institution. CREDO is best known for its research studies on charter schools which are publicly funded schools that are promoted to compete with traditional public schools. The Hoover Institution is a conservative think tank that is totally pro-charter and a believer in using market forces to reform the U.S. educational system.

Raymond is also married to Professor Eric Hanushek, also at the Hoover Institution, who was a pioneer in creating systems that evaluate teachers by student standardized tests. He has been one of the most ardent advocates of markets in education in the US for more than 25 years.

Given this background, a few ears pricked up at what Dr. Raymond said. Her comments were even featured in a column in the Washington Post.

Raymond made the comment in speaking on the release of a CREDO report on charter schools in Ohio. The report itself was funded by the Thomas B. Fordham Foundation, another pro-charter and pro-market think tank. This is what she had to say:

This is one of the big insights for me. I actually am kind of a pro-market kinda girl. But it doesn’t seem to work in a choice environment for education. I’ve studied competitive markets for much of my career. That’s my academic focus for my work. And it’s [education] the only industry/sector where the market mechanism just doesn’t work. I think it’s not helpful to expect parents to be the agents of quality assurance throughout the state. I think there are other supports that are needed. Frankly parents have not been really well educated in the mechanisms of choice.… I think the policy environment really needs to focus on creating much more information and transparency about performance than we’ve had for the 20 years of the charter school movement. I think we need to have a greater degree of oversight of charter schools, but I also think we have to have some oversight of the overseers.

Raymond’s comment was first reported by Stephen Dyer, education policy fellow at Innovation Ohio, on his 10th Period blog and published in The Progressive. Dyer said that he and others in the room were stunned.

Considering that the pro-market reform Thomas B. Fordham Foundation paid for this study and Raymond works at the Hoover Institution at Stanford—a free market bastion, I was frankly floored, as were most of the folks at my table.

For years, we’ve been told that the free market will help education improve. As long as parents can choose to send their kids to different schools, like cars or any other commodity, the best schools will draw kids and the worst will go away. The experience in Ohio is the opposite. The worst charter schools in Ohio are growing by leaps and bounds, while the small number of successful charter schools in Ohio have stayed, well, a small number of successful charter schools.

…to hear free market believers say that 20 years into the charter school experiment its foundational philosophy—that the free market’s invisible hand will drive educational improvement—is not working? Well, I was stunned to hear that.

Stunning, yes, but it seems Raymond has been convinced finally by her own evidence. CREDO has published many studies of charter schools over the years. Some have found positive results by charter schools in some states, but none in others. Two large studies of charter schools across the US found that charter schools have performed no better than traditional public schools.

Let’s hope that the advocates of independent public schools in Australia will also become more willing to look at the evidence and put aside their blind faith in the market.

Trevor Cobbold

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