Friday, October 27, 2006

Spending More To Get Less

Care of CoyoteBlog comes a study from the Goldwater Institute regarding Arizona public schools. The author summarizes the findings on Cato's blog:

  • "[P]ublic schools spend one-and-a-half times as much per pupil as do private schools. Or, looked at the other way, private schools spend a third less than public schools."

    How is it public schools spend more money, yet are consistently and inarguably worse? Hmm. Let's think, folks; let's think real hard.

  • "Teachers make up 72 percent of on-site staff in Arizona’s independent education sector, but less than half of on-site staff in the public sector."

    This doesn't rattle the backboard for us as hard as the first stat does. Your typical public school will have a larger student body than your typical private school. We wouldn't be surprised to learn that there are certain diseconomies of scale when dealing with swarms of unruly teenagers. If you can get by with a 100:1 administrator-to-student ratio with less than 1000 students, but need a 50:1 ratio with 10,000 students or more, we don't think that necessarily means public schools are less efficient. At this point, though, you could confront us in a dark alley with Ockham's Razor: "public schools are bureaucratic nightmares" is the simpler explanation.

  • "When teachers’ 9-month salaries are annualized to make them comparable to the 12-month salaries of most other fields, Arizona independent school teachers earned the equivalent of $36,456 in 2004 — about $2,000 less than reporters and correspondents. The 12-month-equivalent salary of the state’s public school teachers was around $60,000, which is more than nuclear technicians, epidemiologists, detectives, and broadcast news analysts. It’s also about 50 percent more than reporters or private school teachers earn."

    We have never been sympathetic to the argument that teachers are underpaid. We'll agree that teaching is hard work (that's why we don't do it), but we believe the salary is roughly commensurate to the work involved. Of course, when you have a powerful union protected by the State negotiating your contracts, your wages may be just a little inflated.

    Next time someone throws you the old chestnut that schools are underfunded, toss it right back at them: "compared to what?" The word under- in underfunded implies a benchmark to measure against. To what field should our nation's public schools receive comparable funding? Power plants (see nuclear technicians, above)? Police departments (see detectives, above)? Health care (see epidemiologists, above)?

Though the Goldwater Institute limited its study to Arizona, we'll bet you your next paycheck that you could duplicate the results in most of the states. Public schools have pretty consistently failed the children of this country and it's not for a lack of spending. The state of AZ is getting $5,100,000,000 (.pdf) in federal money for Fiscal Year 2007. That five billion, one hundred million dollars, if left in the hands of taxpayers, could pay the elementary and middle-school tuition of one million, three hundred and seventy-eight thousand children (taking the Goldwater Institute's figure of $3700 per year as an accurate average).

The absolute inefficiency of public schools is a mystery to anyone who hasn't studied von Mises or Hayek. To the rest of us, it's a mystery why you'd debate it. The function of prices in a market economy is not simply to acquire profit, but to communicate information. High prices communicate a high demand and a low supply; beggarly prices tell the opposite story. No bureaucracy can be as efficient as the price system when it comes to disseminating the relative supply or scarcity of various goods, or the various demand or disinterest in multiple services.

Anyone who condemns prices (e.g., "you can't put a price on a child's education!") is condemning knowledge. There aren't many places where you can get a job by defending ignorance, though the local school board will undoubtedly welcome you.

Wednesday, October 04, 2006

Superstition in Mainstream Politics

CoyoteBlog, one of our favorites, posted this intriguing thought comparing the American Left's views on economics with the American Right's views on evolution:
In fact, the more I think about it, the more economics and evolution are very similar. Both are sciences that are trying to describe the operation of very complex, bottom-up, self-organizing systems. And, in both cases, there exist many people who refuse to believe such complex and beautiful systems can really operate without top-down control.

For example, certain people refuse to accept that homo sapiens could have been created through unguided evolutionary systems, and insist that some controlling authority must guide the process; we call these folks advocates of Intelligent Design. Similarly, there are folks who refuse to believe that unguided bottom-up processes can create something so complex as our industrial economy or even a clearing price for gasoline, and insist that a top-down authority is needed to run the process; we call these folks socialists.

It is interesting, then, given their similarity, that socialists and intelligent design advocates tend to be on opposite sides of the political spectrum. Their rejection of bottom-up order in favor of top-down control is nearly identical.
This Manichean bias, to view the complex interchanges of millions of individuals on a historical stage as a battle between Good and Evil, has been documented by Umberto Eco, among others. History rarely vindicates the elaborate conspiracy theory.

Speaking of: we have yet to see any truly compelling theories as to how oil companies are manipulating the price of gasoline, why they would do so to favor the Republicans (since about a quarter of their multi-million dollar lobby goes to Democrats), and what evidence there is to connect the two. Conspiracy theories almost never hinge on substantial evidence and falsifiable hypotheses. Rather, theorists take the indication of several prominent coincidences, the stroked chin and the arched eyebrow as sufficient proof. We remain harder to convince.