October 4, 1996

Education Reform: It’s Not that Simple

by Laurie A. Cummings, Senior Consultant for Economic and Education Policy

The 1996 Governor’s Education Summit on September 17 featured a speech by Robert A. Lutz, president and CEO of Chrysler Corporation. Lutz’s speech, which championed competition among schools as the best way to reform education, both enthused and inflamed the audience.

Lutz urged the educators in the audience not to fear competition and stated that it "may be the best thing that’s happened for teachers since chalk." He admits that competition among schools may not be fair, but stated that "Fairness is irrelevant! The products speak for themselves—end of discussion." Lutz also assumes that when a school fails, as when a businesses fails, it "will be replaced by something better," and he believes that to be "a wholly good thing."

Lutz’s speech was a candid presentation of the assumptions and beliefs of many market-based education-reform advocates. Competition-based reform basically means directly tying the amount of money that schools receive to the number of students they can attract. If a school cannot attract enough students to stay in operation, it closes, just as a company goes out of business if it doesn’t have enough customers.

Forcing schools to improve in order to survive sounds, in theory, like a sure-fire way to improve the education system. However, in practice it is not so simple. There are some complex questions about this approach to which we do not yet have answers.

• How do we ensure that failed schools will be replaced by better ones—that the problems of today’s public schools are not transferred to their replacements?
• How do we ensure that schools that are willing to change and improve will be able to do so successfully. Will they have the resources and know-how to improve in the face of growing competition?
• Will education become better for all students? How do we improve the schooling of students who are "left behind" by parents who do not take the time and make the effort to move their children out of failing schools?
• What about students whose parents lack the financial resources to transport them to "better" schools?
• How will parents know which are the better schools?
• What are the long- and short-term costs—financial, social, and educational—of letting schools fail? What happens to the students during failure but before closure?
• Is replacing "uncompetitive" schools with "competitive" ones more cost-effective than improving current schools?
• How will the progress of schools be monitored under a market-based system?

Policymakers must carefully consider these and other questions before jumping into a school system such as that championed by Lutz. The transition to competition-based education is not as simple as Lutz and others may believe. The plain fact is that no one knows exactly what will happen. I am not suggesting that market-based reforms cannot work, but I do believe that they should be initiated incrementally, with caution, and with the education needs of all students in mind.