Public Education Privatized

In reading an article from the “Reason Public Policy Institute” I discovered an interesting blend of educational advancement and big business profit. Education can be defined as a public good in the sense that the results of higher education can lead to improvements in future technology. Education can do this by further instructing students to perform more effectively; therefore we can all benefit in the future from improvements in education today. While forms of education are usually provided in either a private manner (revenues mainly from tuition) or a public manner (revenues mainly from the state) there has been a proposed merger between the two. However, the merger that has formed has been a synergy between “big business” and public schools. In Buchanan’s “Economic Theory of Clubs” he closes “the awesome gap between the purely private good and the purely public good” essentially developing a model defining that all goods have both some “publicness” and some “privateness” as long as exclusion is possible. Also the “quantity of the good and the cost-sharing arrangements must be determined simultaneously”. This article enhances Buchanan’s theory by illustrating that there are economics advantages of privatizing this public good (education). This article describes how big corporations (e.g. The Mall of America, American Bankers Insurance Group, etc.) have been aligning their interest with public schools to provide them with: “classroom space, buildings or land, furnishing or equipping existing classroom space, equipment, maintenance services and utilities, teaching programs, and managing schools or school districts.” By doing so these corporations gain public support, marketing capability, and, most importantly, tax breaks. This mutual agreement maintains the balance between the cost-sharing arrangements in Buchanan’s model. The economic advantage is that teachers now have an incentive structure to perform and teach more effectively. Public educators often lack “incentives to produce results, to innovate, to be efficient, to make the kinds of difficult changes that private firms operating in a competitive market must make to survive.” Where as private practice, or contracted teaching, “breaks this monopoly and offers benefits to students, schools, and teachers.” These include increased competition among education providers, and the availability of parental choice. This merge of big business and public schooling clearly leads to a more economically beneficially educational system - therefore improving our future “brain capital”; all while supporting Buchanan’s Theory of Clubs.