You had to ask

Over at the Pittsburgh Comet, Bram asks what I think of school vouchers and charter schools as the cure for what ails the Duquesne School District. Here was what I said, in answer to his question and in response to someone else who posted a comment at his blog:

I'm not opposed to charter schools, and I'm not opposed to school vouchers that are targeted at low-income families, or families who live in distressed communities. But let's remind our libertarian friends that those are government solutions. Money for vouchers would come from public coffers, and charter schools are public schools--they just happen to be freed from some state regulations and can choose to specialize in certain areas.

In other words, even if government wouldn't be providing education to these students, it would be paying for it. And that's as it should be, because education is a public good. We rely not only on our own education, but on the education of others to allow society to function.

Now, plenty of people think that education is one of many things that the private sector could do better than the public sector. Never mind that privatization of a school in Wilkinsburg several years ago failed, nor that, to me knowledge, the nation's for-profit K-12 education firms have yet to actually make a profit. (I could be wrong on that.)

We can talk all we want about government bureaucracy, or union rules, but at the end of the day, one of the biggest determinants of education success is socio-economic status, and the big challenge is to help schools overcome the disadvantages that poverty brings.

Certainly, many public schools have found ways to do this, and some private schools as well. In Pittsburgh, we have the Extra Mile Education Foundation, which funds four K-8 Catholic schools that primarily serve low-income, African-American students. (And mostly non-Catholic, if I'm not mistaken.) These are great schools, and many of their students continue their success through high school and attend college.

But this brings us back to what Bram is talking about. I don't think the Extra Mile schools go out recruiting students. Perhaps they get referrals. I'm guessing that most children end up there because their parents found out about the schools, or were told about the schools, and made the decision to send their children there. They took all the necessary steps to enroll them. These kids may be poor, but they have parents who care about their education and are motivated to do something about it.

So the question is, how we can help those parents do even more for their children, and what can we do for the children who maybe aren't so blessed? Government can not do everything, you are correct, am in bp, but we have to acknowledge that if we just write off these children, than our most ugly predictions and fears about them will come to pass, and the problems the result will not confine themselves to Duquesne.

Here are some other thoughts I have on privatization of public services.

A private matter

My friend and former co-worker Bill Steigerwald extolls the virtues of highway privatization in his column in today's Pittsburgh Tribune-Review. For the purposes of this discussion, I'll take Bill's word for it that highway privatization has worked as well as its advocates claim. I'll add that philosophically, I have no problem with privatization of government services, and I definitely think it's option we should consider.

I do, however, think it is wrong to believe that privatization is a panacea for all the problems that state, local and the federal governments face. Let's consider, for a moment, the logic behind privatization: Private firms are better able than governments to deliver public services because free market competition forces companies that want to survive and prosper to provide goods and services with maximum efficiency at the lowest cost. Government, on the other hand, faces no competition, and while elected officials are answerable to the public, the bureaucrats who administer government services are not, and they are often protected by work rules over which elected officials have limited control.

Now, let's look at the some of the flaws in that logic. First of all, private enterprises, like governments, are composed of human beings who make mistakes, who fail, and who do bad things deliberately. History of full of companies that have made disastrous mistakes. It's why companies go bankrupt. It's why they fail.

The problem is that the consequences of those mistakes can be deferred for years. Enron, for example, was playing games with its books long before anyone noticed. Even after business school students and a few enterprise reporters began to spot the cracks in the energy giant's foundations, Enron's failures continued to escape widespread public attention until the company was on the verge of collapse.

Second, the free market system doesn't really reward companies for providing excellent goods and services; it rewards them for being profitable. Companies can increase profits in any number of ways without improving customer satisfaction. They can produce cheap products. They can cut back on safety measures. They can employ off-the-books workers and not pay taxes on them. In some cases, these practices can catch up to them. But again, it may take years, and in the meantime, people may be hurt or die.

There's a dangerous corollary to the aforementioned idea: Companies can stay in business for years without being profitable as long as they can appear to be profitable. Enron is again a good example, but there are plenty of others. (If you want an example close to home, think Phar-Mor.) People invested in Enron, and continued to do business with the company, long after they should have, because on paper the company appeared to be thriving.

Third, social conditions that have hobbled governments in providing quality services are still going to exist no matter who provides them. I'm thinking here of education. The president can talk all he wants about the "soft bigotry of low expectations", but the bottom line is that academic achievement correlates strongly with family income: Students from wealthier families perform better in school than those from poor families. This doesn't mean poor people are stupid; it does mean that children of affluent families come to school with several advantages over their low-income peers. Some public and private schools have overcome the disadvantages posed by poverty, but those disadvantages are real and will not go away just because you give people vouchers for their kids to attend private schools. (And I happen to be in favor of school vouchers for low-income families.)

Finally, there is no guarantee that privatization will increase accountability. It may even dilute it. What you are doing by outsourcing services to private companies is adding another layer of bureaucracy between the constituents who receive those services, and the elected officials who are ultimately accountable to those constituents. And that extra layer is one that is not subject to many of the laws that require government business to be conducted in the public eye.

None of this is to say that we should not bother outsourcing government functions, and selling some government assets, to private concerns. But we have to consider that we might be trading one set of problems for another.