Edison Comes in from the Storm

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Edison Schools, the country's largest-for profit manager of public schools, announced that it'll be going private (as opposed to being a publicly-traded company, that is). As Thomas Sowell once noted, there's something odd about naming things with respect to intentions, since "welfare programs" often fail to increase welfare, and, as in Edison's case, "for-profit" companies often fail to turn a profit.

Plenty of people are eager to point to Edison's troubles as proof that "for-profit" and "education" don't mix. As the astute Marie Gryphon notes, however, the fact that private institutions actually are allowed to fail when they can't deliver the goods is a feature, not a bug. But I'd add to her analysis my own suspicion that the Dr. Moreau-style hybrid of public schools with private managers isn't a particularly effective solutions. You can outsource central planning to Central Planning Incorporated, you can give a witch doctor an MRI machine, but these aren't the sort of reforms that take real advantage of the systemic virtues of markets and modern medicine, respectively. Private companies tend to be more efficient because they face real competition. Edison may indeed face competition with other managerial firms, but it's still filtered through the political process, rather than responding directly to individual parental preference.

NEXT: The Right To Be Creepy

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  1. Another semantic quibble, Julian:

    Why does “privatizing” something automatically mean placing it under the control of some corporation? The process usually means taking property or institutions paid for with taxpayer sweat, and selling them off for a tiny fraction of their real value to politically connected plutocrats.

    Murray Rothbard and Karl Hess both argued that the best way to “privatize” state property was to treat it as unowned property to be “homesteaded” by those currently occupying and using it. In the case of the publick skools, that would mean abolishing citywide school boards and making individual schools’ faculties directly responsible to the parents whose kids were attending them: in other words, transform them into a consumers’ co-op. Of course, this would have to eventually entail eliminating funding by compulsory taxation and running them on user fees.

    Larry Gambone calls this process mutualization: decentralize all social services to the smallest possible unit (ideally neighborhood), place them under the cooperative control of their clients, and eventually run them on a voluntary basis.

    Sounds an awful lot like what Proudhon called dissolving the state apparatus in the social body.

  2. A “single payer” isn’t much better than a “single provider.”

    A while back I did a summer internship at a Department of Energy Lab. It was not pleasant. What’s relevant is that the lab was run by a private contractor on behalf of the gov’t. As far as I could tell the arrangement meant we had twice as many managers and administrators.

  3. On the other hand, by taking the company private, they won’t have to release information that could be useful in determining how they’re performing at running the schools, what they’re spending, how much the executives are being paid, etc.

    In other words, it’s easier to be a fat cat overpaid, under-efficient administrator if you’re a private company and don’t have reporting requirements.

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