If we reduce education to a simple act of voluntary exchange then it is clear that it is similar to many other services that are traded freely on an open market. Parents profit from being able to provide education for their children that they could not provide themselves and the for-profit provider will profit as long as the revenue received is greater than the costs incurred. Those children who receive the education will also be expected to profit from the experience and, finally, the wider community will profit because of the benefits associated with having a better educated community and a greater understanding of history, science and culture. Therefore it’s a win win win win situation!
That said, while the profit motive is essential, it is not sufficient to guarantee that we have the greatest possible variety of educational opportunities available. This is because the profit motive may also encourage some companies to seek government protection against competition, resulting in a private monopoly, which brings with it many of the problems associated with a public monopoly. The key question therefore is not whether for-profit companies should be free to deliver publically-funded education, but whether there should be freedom of entry to all different types of organisations from both home and abroad. Freedom is therefore the missing ingredient in education and all current problems within the sector are directly related to the government policies which continue to restrict freedom of entry and the freedom of parents to choose.
Furthermore, to suggest that the profit motive is incompatible with education implies that freedom is also incompatible with education. However, why is freedom deemed essential within religion, the media and the publication of children’s books but deemed destructive when it comes to the delivery of children’s schooling? And why is it that political interference, central planning and a government monopoly are recognised as being completely unacceptable with the media and religion, but welcomed with open arms in education? The fact that these questions are now being asked shows just how confused and perverse this debate has now become. After all, what could possibly be wrong with promoting and protecting the forces of freedom in education?
In education markets around the world where government restrictions have already been removed, it is becoming increasingly clear that there is no single best model of a school, college or university. Instead there is a variety of different legal and organisational forms and structures active in this sector which in turn adopt a variety of different financial, management and educational models and practices to help them deliver a variety of different educational opportunities. We should also expect different models, structures and forms to emerge as markets develop and the rate of innovation begins to increase. Education is therefore best viewed as a self-organising system in which learning emerges spontaneously over time in a variety of different forms. Central planning in education is therefore redundant and instead governments must focus on creating an environment that will encourage the greatest possible variety of educational opportunities to develop. In fact central planning in education has always been redundant. The associated hidden costs and unintended consequences are now becoming increasingly obvious.
James B. Stanfield is the editor of The Profit Motive in Education: Continuing the Revolution.