Education Opinion

Education Services as a ‘Regulated Monopoly’

By Phillip C. Schlechty — April 10, 1991 10 min read

I trust parents, but I trust the community more. Children are not only members of families; they are future voters, future leaders, and the future of our way of life. To deny the community the right to express its interest in the future of our children is irresponsible. Under the existing system, community interests, parental interests, and the interests of children are not well represented. An education system organized as a public utility might better serve all these interests.

Public education--education funded through tax dollars provided by all the citizens--is a natural monopoly. It is so because the interests of entire communities and total societies are affected by the quality of education provided to the young. Education is the means by which societies perpetuate the conditions of their own existence. Such basic interests cannot be divided without harm to the common good.

Individuals who do not choose to use the system provided in the common interest are not compelled to do so. The Amish do not use the public school system. People who are afraid to fly do not use the municipal airport. Most citizens do not use the state-funded university system. But these services are made available in the common interest and for the common good.

Furthermore, people can, if they choose and at their own expense, create private alternatives to the services provided publicly. Some people use taxis instead of the government-funded and -operated bus system. Some use limousines. But tax dollars do not support taxi service or limousines.

Parents do have a special interest in the quality of the education their children receive--but theirs is not the only interest. Nonparent taxpayers, business leaders, civil-rights activists, religious groups, retired citizens, and children not yet born have an interest in the quality of education.

These interests cannot be divided and parceled out in some Solomonic way, no matter what the advocates of choice may believe. Letting parents alone choose the quality of education to be provided discounts the legitimate interests that other members of the society and the community have in those qualities.

Even now, parents are not the driving force behind school reform. Certainly some parents are concerned about the quality of education received by their children, but as the annual Gallup Poll reveals, the further one is removed from a school, the more likely one is to be dissatisfied with that school. Indeed, some critics of schools are distressed that parents are not distressed. Some feel that parents in America are too satisfied, that they have expectations that are too low.

Then there is the political fact that parents are a numerical minority of the voting population--and a decreasing minority at that. There is also the biological/demographic/social fact that parents represent the youngest members of the adult population, which means that, as a group, parents are likely to be less politically powerful than are older members of society.

Given these facts, it seems misguided to assume that fundamental school reform can be much advanced by parental choice alone. Others will support the choices made by parents only so long as parents choose what others--especially politically powerful others--want them to choose. Choice, if it is to be realized, must be community choice and voter choice, not simply parental choice. Furthermore, the choice must be between alternative systems of education rather than simple choices regarding which schoolhouse one’s children will attend.

One way to honor the common interest in education and provide choice would be to organize education as a regulated monopoly, much as many public utilities are now treated. Some school systems--note that I did not say schoolhouses--might be operated by privately controlled not-for-profit corporations, and some might, as they are now, be operated by local governmental entities organized as not-for-profit corporations. Indeed, if the citizenry desired, these latter entities could be designed to ensure that the present system of governance is maintained. Furthermore, if a state saw fit, for-profit corporations could be invited to compete, though the quality-control problems presented by proprietary schools argues against such inclusion.

But regardless of the source of control of programs and operations, all school districts would be run in ways that acknowledge the interests of the public in the quality of the education provided within the context of the community. And the state, through a public-education commission, would ensure that the interests of the community were acknowledged and served.

How could this happen? The answer to this question will vary from state to state but, in general, the following seem to be likely actions:

  • A governor and a state legislature could craft enabling legislation that would establish a public-education commission charged with ensuring that every political unit in the state--city, county, village, town--had access to a chartered education provider of the voters’ choice that contracted with the state (and implicitly the community) to provide educational services of a known quality and at a known--and fixed--price. Hearings could be held, just as they are now held for other public utilities. At such hearings, potential providers would be asked to provide detailed descriptions of what they would do--and the standards they would meet--for the dollars provided.
  • In setting up the public-education commission, the legislature could require that all education-service providers--whether governmental, for-profit, or not-for-profit--met certain requirements. For example, service providers could be required to ensure that every child living in the political unit be provided access to schools run by the provider, that transportation would be provided, that racial balance would be maintained, and that specific school-performance data would be made available for public examination and comment. In those states and communities where collective bargaining was in place, the collective-bargaining rights of employees could be guaranteed. Indeed, within the scope of what is proposed here, it would be possible for teachers--through their union or independent of it--to form a not-for-profit corporation and compete to be the service provider for the community.
  • It could, furthermore, be required that the provider indicate how the schools would interact with other agencies that serve children and youth. And, if a state were really serious and daring, it might require that the service provider be responsible for coordinating and directing all child and youth services in the community, and that all state funding provided to support such services would flow to the chartered provider.

  • To ensure that the commission did not approach its task as some public-utility commissions seem to approach theirs--that is, as apologists for the utility being regulated--legislators could require that the commission file biennial “audit” reports, in which the operations of each service provider would be made a matter of public record.
  • Under standards established by the state, education-service providers would be chartered and permitted to compete to provide educational services to any political unit in the state, with the proviso that each political entity could designate only one service provider to receive state funding. The length of the contract for a provider should be at least 10 years, subject to a new election if the education commission judged that the provider had not fulfilled contractual obligations and commitments.
  • Such elections would only be in order if, in the judgment of the commission, the provider failed to provide the quality and quantity of services promised at the time of election, or if the rate of citizen complaints regarding the quality of service received reached an unacceptably high level.

  • The choice of a service provider could be made through a special election, held once every 10 years, with the exception of cases in which the commission decided that there was sufficient concern about performance to warrant a new election.
  • To be a service provider, a chartered education provider would need to gain a majority vote from the electorate. The local board of education, assuming it were willing to meet the provisions to gain a charter, could compete to be the service provider.
  • Each community (and/or the state) would provide adequate physical space to house school activities. At the time of the election, each service provider would be expected to make available detailed plans--and budgets--for dealing with such matters as athletic events, sports programs, and other co-curricular matters, as well as matters academic, vocational, and social.
  • The state would provide an established amount of money per student, and the service provider would indicate what it would provide in exchange for this fee.
  • Local communities could petition the education commission for permission to provide services beyond those made possible through state funding, with the understanding that at the end of a certain time--probably six years--the results of these efforts in terms of pre-established quality indicators would be made public. If the results were beneficial, the education-service commission would petition the legislature to provide funds to support an incentive for all communities to provide such services.
  • Finally, to ensure that equity issues were addressed, state legislatures could provide special funding to support school districts with disproportionate numbers of children who were handicapped or were otherwise likely to need special services and special support.
  • Bureaucracies, whether public or private, are very resistant to change. One of the most powerful incentives to change, as the American automobile industry has demonstrated, is an outside threat.

    The system proposed here would create such a threat. It would, in fact, provide those who run the existing system with an incentive to change the system, even when it was uncomfortable to do so. And it would provide creative alternatives to the existing system that could serve in the stead of the government-run system if the government-run system failed to respond--much as Federal Express and UPS provide an alternative to the government-operated postal system.

    It is true that only the government can represent the interest of all the people. But it is not true that the government must have a monopoly over the conduct of the people’s business to ensure that that business is done in the interest of all the people.

    Educators and reformers need to understand that natural monopolies can be governed in ways that encourage competition and responsiveness and at the same time ensure that the interests of all the people are served. One of the ways to do this is to organize education as a public utility.

    The proposal I advance avoids several of the critical flaws built into most existing choice plans.

    (1) It acknowledges that the total community, not just parents, has an interest and a stake in education, and it provides a forum in which this community interest can be expressed.

    (2) It recognizes that “community” is not defined by the biological fact of being a parent, and by where one chooses to send one’s offspring to school. Parents do not constitute a community; they are a part of the community.

    (3) This proposal recognizes the simple fact that the power to provide tax support is the power to create or destroy, and that those who pay taxes, in the long term, determine the choices that will be made.

    (4) Most important, organizing education as a public utility can serve both equity interests and accountability concerns. Choice--when it operates schoolhouse by schoolhouse and parent by parent--is subject to much abuse in both of these areas. Anyone who believes that some parents will not exercise choice on grounds other than those that have to do with high-quality democratic education misunderstands why the Brown v. Board of Education decision was necessary in the first place. Anyone who believes that academic quality is the basis of choice in all, or nearly all, instances does not understand the power of basketball and football in the life of schools and communities.

    I trust parents, but I trust the community more. Children are not only members of families; they are future voters, future leaders, and the future of our way of life. To deny the community the right to express its interest in the future of our children is irresponsible. Under the existing system, community interests, parental interests, and the interests of children are not well represented. An education system organized as a public utility might better serve all these interests.

    A version of this article appeared in the April 10, 1991 edition of Education Week as 1