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.


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