The conventional wisdom is that K-12 Public Education in America is a failure. However, some people point to the stunted nature of Private Education as proof that privatization is not the answer.

Often cited is the fact that there is a long 'waiting list at the expensive public schools'. Does this make sense? Can we apply Econ101 and come up with an explanation?

Remember: economics deals with the allocation of scarce resources.

If you think about it, the fact that there are waiting lists for the good pvt schools actually demonstrates the impact of 'free' public education on the market for Private Education.

The analogy that comes to mind is that of the Private Enterprise (black market) shops in the former Soviet Union.

While the grocery stores in the Soviet Paradise had bare shelves, people would line up for hours for a chance to get their hands on the scarce luxuries (e.g. meat) at the Pvt stores.

Except for the fact that Pvt schools in the US are not illegal, the scarcity of good education as a commodity is the result of Govt control of this sector.

BTW, if the NEA had its way, don't you think that Private schools would be illegal! If that sounds absurd, stick around for a decade or two ..

And now, for a thought experiment!

Your name is GoodTeacher. You, along with three other good teachers, decided to become educational entrepreneurs - so, you start a company called EnterpriseEd. You see a market in AnyCity, USA because the public schools were underperforming.

Clearly, you could make a case that there is a need for better schools. But is there a 'demand' for a for-profit school?

Rather than wait around for public schools to 'reform' themselves, EnterpriseEd decides to do something about it themselves - exemplifying their true American spirit!

So EnterpriseEd puts together a business plan - and off they go in search of funding to start a pvt school. They finally manage to get in front of a Venture Capital firm called GotBucks, Inc.

The first question (and maybe the final one) from GotBucks would be "How do you compete against a 'free' system"? With parents already paying for public schools via taxation, can you quantify the demand?

EnterpriseEd (along with its charter member, GoodTeacher) don't have a good answer, because their addressable space (a term that VCs like to use) is almost non-existent.

Lacking capital, GoodTeacher (and her partners) go back to their jobs as Govt servants, depriving the citizens of AnyCity, USA of an alternative.

Now, imagine this scenario taking place all over the US, and for many, many generations. Is it surprising that there aren't enough pvt schools? Is it surprising that there are shortages in a country that lacks for very little in most other areas?

What is the missing ingredient?

As I argue in "Johnny can't read .. it's time to think outside the box", that missing ingredient is free-enterprise.

A visitor from a foreign country would be justified in making the following observation: "Free-enterprise institutions work well in America, delivering good quality at prices that are affordable to everyone. Americans must love their food and entertainment, because they have made sure that those areas benefit from this uniquely American thing called free enterprise.

"It would also appear that the quality of education is unimportant to Americans, as long as there is access to it. Why else would they have utilized a worn-out, broken down system to educate their kids? Americans also seem to consider teachers to be inferior professionals . Somehow, Americans think that they are not really qualified. They NEED a Union, they need to be cocooned from the marketplace."

I disagree vehemently with any notion that teachers are 'weak', either intellectually or morally. I've met many, many teachers who have the intellectual and moral strength to succeed in ANY profession. They choose to be teachers, because it is THEIR LIFE. But, any success they have comes IN SPITE of the system - not because of it. They will continue to be the best teachers in a free-enterprise system of education. In fact, they will be 'recruited' by many schools, bidding desperately to get the best staff on their teams.

The current system is designed to attract mediocre people into the teaching profession. The exceptions to that rule are a few really good, motivated, talented people who burn out after a decade and (if they're lucky) get recruited by the few private schools that manage to survive in the swamp created by Public Education.

We love to think that our system attracts thousands of Jaime Escalantes a la "Stand and Deliver". But that is not what really exists in our schools. We're all impressed by the movies that show a heart-of-gold teacher with the forbearance of Mother Theresa and/or Gandhi, the intellect of Edison or Mme Curie and the street cred and toughness of Morgan Freeman. The fact that some teachers exist who embody all those attributes is wonderful - but in a macro sense, a system that is designed to work only when run by supermen and superwomen is destined to fail.

Observe that the private sector produces SUPER quality (forced by competition) while being run by seemingly NORMAL individuals. Similarly, a private sector education system would also produce high quality output (well educated kids) while harnessing the productive abilities of teachers and administrators.

If we don't switch to free-enterprise education, we are dooming future generations of students to mediocrity. We will also lose many potentially wonderful teachers.