The Free Market Is Incompatible With Public Education

Charter schools think like businesses, not like schools, because charter schoolsbusinesses. We cannot be surprised when they act like businesses, and we cannot keep hiding from a discussion about the implications of turning that business mindset on a public good.
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Closed sign on chain link fence, close-up (B&W)
Closed sign on chain link fence, close-up (B&W)

The initial spark for this piece was going to be this story out of Philly, where parents are shocked, upset and frustrated to learn that the charter their children are attending is bailing on them at the end of this year.

But at this stage of the game "Charter Closes Doors and Abandons Students" is completely unremarkable, like breathless coverage of the sun rising in the East. The Center for Media and Democracy has done huge work on this, producing a map of the 2,500 (that's two thousand, five hundred!) charter schools that closed by 2013. CMD has also ramped up pressure on the US Department of Education, which loves charters, pushes charters, throws money at charters -- but in its "transparent" reporting claims to have no idea how many charters have actually closed. (Meanwhile, CMD continues to dig out the truth about charter scamming like this amazing report about KIPP. Do you contribute to the CMD? Because you really ought to.)

Why do so many charters close? There's no mystery to it. Here's a quote from the Philly charter CEO:

Kenderton is facing significant financial challenges due to a number of factors, including the school's rising special education costs. As a result, Scholar Academies has concluded that, next school year, it is no longer able to manage the school in the best interest of kids.

Charters close because charter schools are businesses, and businesses close when it is not financially viable for them to stay open.

The free market will never work for a national education system. Never. Never ever.

A business operating in a free market will only stay in business as long as it is economically viable to do so. And it will never be economically viable to provide a service to every single customer in the country.

All business models, either explicitly or implicitly, include decisions about which customers will not be served, which customers will be rejected, because in that model, those customers will be detrimental to the economic viability of the business. McDonald's could decide to court people who like upscale filet mignons, but the kitchen equipment and training would cost a whole bunch of money that would not bring a corresponding increase in revenue, so they don't do it.

In a particularly apt example, FedEx and UPS do not deliver to the remoter rural areas. If you hire FedEx to deliver a package to your uncle at the end of Bogholler Road in Outer Ruralsville, what they will actually do is sub-contract the United States Post Office to finish the delivery for them.

Note what the CEO said above. Special ed students are too expensive for their business model. When we see across the nation that charters largely avoid students with severe special needs, or English language learners, this is not because the operators of those charters are evil racist SWSN haters. It's because it's harder to come up with a viable business model that includes those high-cost students. Likewise, you find fewer charters in rural and small town areas for the same reason you find fewer McDonald's in the desert -- the business model is commonly to set up shop where you have the largest customer pool to fish in.

Of course, you can game this system a little by creating government incentives. Uncle Sugar can say, "We'll give you a tax break or a subsidy if you will go serve this customer base that it ordinarily wouldn't make economic/business sense for you to serve." But now it's not a free market any more, is it?

Look. As always, I'm not arguing that business-people are inherently evil and dastardly and wrong. But the values and mission of a business in a free market are incompatible with the values and mission of public education.

The first question of the public education system has to be, "How can we get a great education for every single child in this country?" The first question for a business has to be, "What model can we use that will keep this business economically viable?' And the answer to that question will never, ever be, "By providing an education to every child in this country." There will always be students who live in the economic cracks, niche customers that no business wants because there will never be money in them. Some charter fans suggest, either explicitly or implicitly, that educating those students will be the job of public education. But that represents a dramatic and complete re-imagining of the purpose of public education, and to repurpose an entire public sector without a public discussion is irresponsible and undemocratic.

In the meantime, charter schools will continue to close when it makes business sense to do so, no matter what sorts of promises they made to the families of their students. Charter schools think like businesses, not like schools, because charter schools are businesses. We cannot be surprised when they act like businesses, and we cannot keep hiding from a discussion about the implications of turning that business mindset on a public good.

Originally posted at Curmudgucation

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