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Tuesday, December 25, 2007

School Funding in Ohio: Why Both Sides are Wrong

Recently, Ohio Attorney General Marc Dann has begun to sue Ohio’s charter[1] schools. Dann clearly does not believe these schools should exist. He says they should shut down because they are failing, which I find ironic considering that Democrats generally believe that when a public school fails, the solution is to simply give it more money. One might think that conservative individuals would advocate for expansion of the charter school system but not necessarily. Traditional conservatives do not advocate the ideas of free enterprise, competition and local control for their own sake. There is a necessary fundamental premise which Ohio has undermined in its charter school system.

There is a big difference between “principled conservatism” and “political conservatism.” A principled conservative looks to the philosophy and intellectual underpinnings derived from centuries of history and research which create the foundation for the ideas of freedom, decentralized power, and respect for individual rights. Related to this idea is the phenomenon that people predictably and rationally act according to their incentives. In practice, one would say that a quality education system will naturally grow, without government intervention, when there is a strong incentive for people to create one.

A political conservative hijacks this eloquent and comprehensive outlook to benefit their favored individuals. For example, they might profess to favor a free-market system, but really they work to enrich their backers. Their allegiance tends to be to people and not ideas. This sometimes is not a bad thing – when doing so brings in donations and votes from individuals because the politician supports each person’s favored policy. However, it has a corruptive effect when it brings in disproportionate support from a narrow sect of well-funded special interests. This of course, is another whole problem itself. In Ohio, we know that many Republicans are merely political-conservatives. For example, our recent former governor, Bob Taft, showed virtually no adherence to the sound policies championed by his father and grandfather.

Modern Liberals and socialists rant and rave about the so-called “profit motive.” They agree with us that the goal of the education system should be to educate children. They say that if a school were to be interested in making money, that interest would corrupt the system and undermine education as the businesses simply pursue more money as opposed to better education. However, Democrats ironically have no problem supporting more tax money for teachers and administrators, despite whether they are failing – this is essentially a profit motive itself.

These thinkers fail to recognize that a good business makes money for a reason. When that reason is because they provide a better product at a lower price, it is a very good thing – notice what Federal Express does in comparison to the U.S. Postal Service. However, when the business makes money because they convinced some politician to allot it to them because the business gave money to their campaign – it is a very bad thing because the incentives are misplaced.

Ohio’s Problem
Ohio started a charter school program after the state had been successfully sued four times.[2] The Ohio Supreme Court had ordered the state to “overhaul” its school funding system. The Ohio Constitution mandates a common system of schools that are “thorough and efficient.” Principled conservatives saw this as a opportunity to show the world the virtues of conservative philosophy. No principle is more important to a principled conservative than the idea that all individuals are created equal and each person must be given a chance to maximize his or her potential.
However, political-conservatives saw this as an opportunity to give wealthy businessmen tax-payer money, similar to what liberals had done for unions in the past. For example, David Brennan, who gave and raised tens of thousands of dollars for Republicans in Ohio, owns a private school business which was given $109 million dollars by the government in recent years. As the New York Times[3] reported, “Federal money helped fuel the growth, with up to $450,000 available to every new school in its first three years. Ohio sweetened that incentive with $50,000 more. Some Ohio charters were formed, not to innovate in the classroom, but to take advantage of the start-up money, experts said, which is in addition to state financing allocated by enrollment numbers.”
We must realize this makes absolutely no sense. The whole premise behind why a private business runs better than a public bureaucracy is because it is forced to run efficiently – it is not rewarded for starting up unless people give it their money, it is not rewarded for serving its customers unless it does so. They must run efficiently or go out of business. They have to please their customers or their customers will go to other businesses that will. Here, state politicians had the state arbitrarily reward the schools for simply coming into existence. Then they continued to reward them simply for perpetuating their own existence. Is it any wonder they have failed? Like failing public schools, they have no incentive to perform well – the state money comes in any way. Bottom line: if they are funded directly by the government they essentially carry the same fundamental flaw as existing public schools.
This feeds Marc Dann’s argument. However, he would simply shift tax-payer money to the existing system, whose incentives are no better constructed. Sure, the public schools might be punished some way, like being labeled a “D” school, but unlike a private business, nobody loses their job, teachers cannot be held accountable[4], parents and taxpayers have no other choice. The profit motive works because profits can always be taken away. The self-perpetuating motive always fails, because one need only convince a politician to allot more money.

Teachers Unions
The Teacher’s Union is more of a mixed issue – as opposed to the “us vs. them” dichotomy we are accustomed to. Certainly, their national representatives have little focus on improving the education system, because that is not their job. They get paid to represent a genuinely good interest – that of teacher’s. All people have a right to lobby the government and this legitimate function is performed by the unions. However, politicians must be willing to put these lobbying efforts into perspective and realize that parents and students are the central focus of the education institution and they themselves are supposed to be the lobbying group for parents and students. Furthermore, more teachers must be willing to consider the idea that they may be much better off working for a competing private business, particularly if job satisfaction is an important quality they look for in their work. Certainly there are more challenges in working for competing businesses than public bureaucracies, but on the other hand, the challenge is to improve services (which is supposed to be the ultimate goal).
So when a group of businesspeople who want to make easy money at tax-payer expense go head-to-head with a teacher’s union who want to make relatively easy money at tax-payer expense, you end up with two groups fighting who are both only partially right. At this level they don’t even debate the important issue of what the government should be doing, but rather which interest group should be benefiting. Because of the lack of any real philosophical difference, the debate comes to resemble a single corrupt party squabbling within itself rather than an actual debate. This creates the constant question of who is being favored and who is neglected, which builds resentment, anger and hatred.[5]

The Solution
The solution is not only clear, but there are clear examples of it: give each individual kid his or her own money or parents 100% tax refunds for money spent for educational purposes - and let them spend it as they choose. This idea is not enough by itself but it strikes to the heart of the issue: empowering parents and students to personally hold schools and teachers accountable. First, no student would ever be rejected from a school for financial purposes. When there is a question of who is benefiting and who is being neglected, the answer is this: the kids and parents choose for themselves, if you want their money, convince them you should get it. This is a much better system than having people convince politicians. Existing schools and their unions feel they will lose out. The answer is that maybe they will, but that is a good thing IF it is because it is good for the students and it was each individual student’s personal choice. We must remember this is how a good institution should always function – similar to how we saw the horse and buggy phase out as Henry Ford made cars available to most people.
We can look to other systems that work this very way. This is how many other countries[6] do it. Their test scores are measurably far better than our best schools. Those who argue against so-called “vouchers” must remember that we do not support “vouchers” for their own sake: we only support the underlying phenomena which makes such an institution work – that of individual choice, full information and natural accountability[7] . “Vouchers” have and will continue to have many failures on the history books when this foundation is not laid.
We must also consider the conversation this stimulates between family members as to which schools will be chosen, the innovation this will mandate in teaching, and the sense of personal responsibility this will create in individual kids. It will force schools to lobby individual people instead of politicians.

Many Americans now embrace fundamental notions of Socialism: that the government is responsible to "educate" every child. This takes the responsibility away from parents, and it is no surprise that our society has seen the effects of this - dependency on public schools and resentment toward them since they often fall short. Many parents do not even consider teaching their children anything themselves. People have been encouraged to think of education as a "right" rather than a service they are paying for. Practically every public teacher notices that children do better who have parents who take responsibility for their child's education. Since many Ohioans are likely to fear independence at first, existing schools should not be abolished, but rather made to compete with any other institution that aims to prove it can do a better job.

What You Need to Know
Schools cannot actually “educate” a person. A person can only use a school as a tool to educate his or herself. Despite nature’s imposed burden of personal responsibility we pay taxes for the good of society as a whole. The taxes are levied forcefully at extraordinarily heavy rates in relation to the services we receive. We often lose our perspective because the government takes away our sense of ownership and personal responsibility by levying blanket taxes, rather than marketing taxes as an exchange between parties. They encourage us to trust them with the money.
Ohioans should pay greater attention to the issue and realize that they are paying for a great education system, they just are not getting it. It is important to support principles of good education and not just the people who promised it. Also we must remember not to be distracted by charged words used by demagogues. At the end of the day, given the status quo, we must remember that the importance of taking personal responsibility for our education and doing our best to demand more for the children of our society.

[1] New York Times, November 8, 2007. “Ohio Goes After Charter Schools that are Failing.”
[2] DeRolph v. State of Ohio
[3] New York Times, November 8, 2007. “Ohio Goes After Charter Schools that are Failing.”
[4] Reason Magazine Online, “How to Fire an Incompetent Teacher.”
[5] The Road to Serfdom, by Friedrich Hayek. (1944)
[6] As ranked by The Program for International Student Assessment. One will notice that the best performing countries are those which used this essay’s recommended financing system such as Finland, Sweden, Hong Kong, The Netherlands, and others. See:
Also look to this video for further support:
[7] The Invisible Hand.

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