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Peter Greene: Why the Free Market Fails in Education

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Peter Greene read about a charter school in Philadelphia that was closing, leaving its students and teachers in the lurch. At first glance, this might seem surprising, but it is actually a feature of the free market in education, not a bug.



Charters close because charter schools are businesses, and businesses close when it is not financially viable for them to stay open.


The free market will never work for a national education system. Never. Never ever.


A business operating in a free market will only stay in business as long as it is economically viable to do so. And it will never be economically viable to provide a service to every single customer in the country.
All business models, either explicitly or implicitly, include decisions about which customers will not be served, which customers will be rejected, because in that model, those customers will be detrimental to the economic viability of the business. McDonald’s could decide to court people who like upscale filet mignons, but the kitchen equipment and training would cost a whole bunch of money that would not bring a corresponding increase in revenue, so they don’t do it.


Apparently some 2,500 charters had closed by 2013. Obviously there have been numerous closings since then, although the U.S. Department of Education won’t release data on how may of the charters it funded have closed.


This is business. Where is Eastern Airlines, Pan American Airlines, Braniff? Where are the small stores that disappeared when Walmart opened? Google the term “brands that disappeared” and you will find dozens of familiar, once iconic brands that no longer exist. Kodak. Woolworth. Tab. Chiclets. All gone.


Public schools are not supposed to open and close in the twinkling of an eye. They are not supposed to compete for survival. They are public services, designed to serve every child in the community who wants to enroll. There is no lottery to enter.


Peter Greene writes:


The first question of the public education system has to be, “How can we get a great education for every single child in this country?” The first question for a business has to be, “What model can we use that will keep this business economically viable?’ And the answer to that question will never, ever be, “By providing an education to every child in this country.” There will always be students who live in the economic cracks, niche customers that no business wants because there will never be money in them. Some charter fans suggest, either explicitly or implicitly, that educating those students will be the job of public education. But that represents a dramatic and complete re-imagining of the purpose of public education, and to repurpose an entire public sector without a public discussion is irresponsible and undemocratic.


In the meantime, charter schools will continue to close when it makes business sense to do so, no matter what sorts of promises they made to the families of their students. Charter schools think like businesses, not like schools, because charter schools are businesses. We cannot be surprised when they act like businesses, and we cannot keep hiding from a discussion about the implications of turning that business mindset on a public good.







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